NACD Diversity Discussion Guide for Directors

In short: This NACD discussion guide is intended to structure board conversations about diversity and build a process for ensuring effective diversity in the boardroom. Initially published in the NACD Report of the Blue Ribbon Commission on The Diverse Board: Moving From Interest to Action, it can help jump-start a healthy, helpful dialogue.

How boards can use this resource:

• Prepare for meaningful diversity discussions in the boardroom

• Effectively define the scope and objectives of board diversity

• Create decision rules for achieving and maintaining the desired levels of diversity

Most Relevant Audiences: the full board and the Nominating & Governance committee

In light of new global trends and business imperatives, the need for diversity of experience, background and perspective has become an important board mandate. Boards have a responsibility to prepare for the future of their organizations and to take the strategic actions necessary to meet shifting stakeholder demands and adapt to the rapidly changing environment in which their companies compete.

This tool—a discussion guide by the National Association of Corporate Directors (NACD)— intends to help boards in the earliest stages of conversation about board diversity. Initially published in the NACD Report of the Blue Ribbon Commission on The Diverse Board: Moving From Interest to Action, it can help jump-start a healthy, helpful dialogue.

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.