Report of the NACD Blue Ribbon Commission on Director Compensation

The Report of the NACD Blue Ribbon Commission on Director Compensation: Purpose, Principles, and Best Practices sheds light on recent trends and current practices of director compensation and recommends best compensation practices based on the commission's view of the fundamental purposes and principles of director pay.

Topics and themes in this report include:

  • The legal framework of a corporation, including the objective of the corporation and the functions of the board.
  • The philosophical framework of the board, including the purposes of director compensation and five principles to determine best practice.
  • The process through which boards create a compensation program, as well as the total value of director compensation.
  • The actions a board should take in considering a director or a director’s firm for professional or financial services to the corporation.
  • The importance of fully disclosing to shareholders all aspects of director compensation.