Report of the NACD Blue Ribbon Commission on Director Liability

Empowered directors help develop strategies that guide their corporations to compete in the global marketplace through appropriate business risk-taking. But, directors will not take such value-enhancing risks if paralyzed by undue fears of personal liability. This report clarifies the realities of directors’ liability under federal and state law, offers concrete practices for liability prevention, and discusses the implications of director conduct.

In this arena, knowledge—gained through optimum information flow and understanding—is indeed power. Armed with the truth about their liability and evolving expectations, directors will be empowered to go beyond compliance and continue to drive the engine of Corporate America effectively.

This resource can help your board:

• Understand director liability through recent trends and issues under state and federal law.

• Meet and exceed compliance through proper information flow to the board.

• Uphold standards for director conduct.

Most relevant audiences: general counsel, independent directors

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.