Director Tip Sheet: Filling in the Missing Pieces on Boardroom Diversity

In brief: Shifting US demographics and a growing body of research that links greater diversity with stronger value creation and risk mitigation are trends pushing directors of both private and public companies to diversify their boards. In response, investors and some state legislatures are letting public companies know that they must either enhance their efforts around diversifying their boards or risk negative proxy votes and/or monetary fines. This tool offers guidance for directors who would like to make a case for a diversified board and accelerate action.

This resource can help your board to

• understand the current state of diversity in the boardroom,

• make the business case for greater board diversity,

• identify methods for building urgency around diversity and inclusion, and

• utilize tips for accelerating minority and women board representation, or “filling in the missing pieces faster.”

The focus on the board’s compensation committee has never been sharper. The components of compensation plans and the link between compensation and company performance are under intense scrutiny from shareholders, employees, policymakers, the media, and other stakeholders. The Report of the NACD Blue Ribbon Commission on the Compensation Committee revisits NACD’s 2003 Report of the NACD Blue Ribbon Commission on Executive Compensation to highlight the new environment in which compensation committees—and, more broadly, boards—are now operating. It recommends that the compensation committee and board work together to establish an executive compensation philosophy that supports the company in creating long-term, sustainable value.

The report includes ten specific recommendations for compensation committees to consider when evaluating their compensation philosophies. It also provides practical tools, such as sample compensation committee charters, a compensation committee assessment, and guidance on executive employment contracts.