The National Association of Corporate Directors (NACD) is an independent, not-for-profit, section 501(c)(3) founded in 1977 and headquartered in Arlington, Virginia. NACD's membership includes more than 1,750 corporate boards as well as several thousand individual members, for a total of more than 24,000 members.[1] Membership is open to individual board members and corporate boards of public, private, and nonprofit organizations from both the United States and overseas.[2]
NACD and a network of more than 20 chapters across 35 U.S. locations provide a peer-to-peer network and education and learning through live and virtual events. Together, NACD and the Chapter Network engage directors looking to cultivate meaningful peer relationships, share real-world experiences and build their knowledge.[3]
NACD is a founding member of The Global Network of Director Institutes (GNDI).[4] Formed in 2012 to enhance collaboration among its members, GNDI provides directors and their boards with access to a wide array of global resources. The network includes 24 institutes and represents over 150,000 directors and governance professionals.[5]
The organization collaborates with various industry leaders such as KPMG International, Sidley Austin, Pearl Meyer, Russell Reynolds Associates, and many more to provide directors with impactful information and data on the topics and practices they value most in corporate governance and board leadership.[6][7]
NACD was founded in 1977 with the goal to educate directors. In 1978 it announced the first comprehensive Director Education Program. Ten years later, NACD recognized the first Director of the Year.[8][9] In 1993, NACD published its first Blue Ribbon Commission Report, offering ten principles to guide audit committees and their oversight of financial reporting as well as risk management and internal and external auditors.[10] In the early 2000s, NACD's Blue Ribbon Commission Report on Board Evaluations helped optimize board composition, while the organization helped shape Sarbanes-Oxley and influence the new New York Stock Exchange (NYSE) and NASDAQ listing rules.[9] In 2004, NACD co-founded the Global Director Development Circle, launched in response to the need to keep directors ahead of international corporate governance and legislation.[11] This program led NACD to globalize the Certificate of Director Education program in 2006. The program has since evolved into the Global Network of Director Institutes.[12] In 2010, NACD acquired Directorship magazine, a magazine dedicated to today's corporate officers and board of directors.[9][13]
In 2020, NACD launched the NACD Directorship Certification® program, the premier board member certification in the United States.[14] As the nation's premier director accreditation, it sets a new standard for director education and includes an ongoing education requirement that prepares directors for an ever-changing array of boardroom challenges.
In January 2022, NACD assembled a Commission of 19 experienced board leaders, investors, CEOs, academics, and former regulators to discuss how intensifying pressures and demands on boards will affect their governance in the coming years and how boards can best adapt their workings.[15] The result of the intensive work of the Commission is The Future of the American Board: A Framework for Governing into the Future. The publication was released in October 2022.[16]
In January 2024, NACD launched the BoardVision podcast.[17] In each episode, board leaders and governance experts share their stories and provide insights on the most significant issues facing corporate boards today and into the future.
NACD's mission, as stated on its website, is "We empower directors and transform boards to be future ready." And their vision is that corporate boards are recognized as trusted catalysts of economic change - in business and in the communities they serve.[18]
NACD is the independent, trusted voice of the corporate director, helping directors achieve better governance and better business.[18] It provides educational advocacy and is a valuable resources to policymakers and regulators that have a role in helping corporate directors achieve good governance and create trust in capital markets. NACD's relationship with policymakers and regulators creates two-way engagement and information sharing and helps it meet its mission to empower and transform boards to be future ready. NACD does not lobby nor make political donations.
NACD submitted a comment letter to the FDIC in 2024 expressing concern that proposed governance and risk management standards could create many unintended consequences beyond the banking system.[21] In 2023, it submitted a letter to the PCAOB's NOCLAR proposal that raised concerns that the proposal would have substantial impact and costs (without commensurate benefits) on audit committees' duties and responsibilities and that it would drastically change the current model of work for audit committees, management, and auditors.[22] In 2022 NACD commented on the SEC's cybersecurity risk management proposal and climate disclosure proposal, agreeing with the intent of the proposed rules and emphasizing its support for consistent disclosure while calling out the potential impacts of new rules on the board and governance.[23]
In both cases, the SEC incorporated NACD feedback on the concept of single-issue directors. In both final rules, the requirement to identify the individual experts on the board was dropped. Also, the SEC incorporated NACD feedback on the role of the board versus management, as they cited in the final climate disclosure rule.
NACD delivers more than 400 programs nationwide to 24,000+ directors each year.[24] These include national and chapter events, foundation courses, the annual NACD Directors Summit, peer-to-peer roundtables, specialty events, and online learning opportunities.[24]
NACD Directors Summit is an annual event for members where the most influential minds in governance gather to advance board effectiveness. It's an experience that celebrates opportunity and positive change in boardrooms, and the event attracts thousands of professionals.[25]
NACD specialty programming includes signature annual events and new programming to reflect emerging trends in the directorship field.[26] These events include NACD Directorship 100,[27] NACD DE&I Awards,[28] and From Battlefield to Boardroom.[29]
NACD offers director education courses as the foundation of their primary credential, NACD Directorship Certification.[30] The former NACD Fellowship® was phased out in 2023.[31]
Virtual Director Professionalism® is the prerequisite course for certification and provides directors with boardroom fundamentals.[32]
NACD's virtual learning programs offer comprehensive education for current and aspiring boardroom leaders. Programs include webinars, Directorship Essentials series, and the Art of Directorship series.[33]
NACD offers various peer-to-peer programming events throughout the year.[34] Programs include Advisory Councils,[35] General Counsel programming,[36] and Chapter programs.[3]
NACD enables directors to earn credentials that demonstrate a commitment to continuous learning and board leadership. NACD aims to help directors stay ahead of emerging issues and connect with a distinguished network of NACD-credentialed directors.[37]
NACD's directorship certification is the premier US-based certification program designed to qualify corporate directors for effective boardroom performance. Based on a professional examination and continuing education, this certification verifies that directors possess the knowledge, expertise, and skills needed to discharge their fiduciary responsibilities as board members.[30] As the leading director credential in the United States, the Certification program provides rigorous governance content, comprehensive preparation, and a credentialing exam to ensure those who hold the credential possess the core competencies required of an effective board professional. Earning the NACD.DC designation demonstrates commitment to governance leadership and personal development, as well as commitment to leading oversight of organizations today and in the future.[38]
NACD has partnered with the CERT Division of the Software Engineering Institute at Carnegie Mellon University and Ridge Global to develop the Cyber-Risk Oversight Program.[39] This program is designed for directors who wish to enhance their understanding of enterprise cyber-risk issues. The course confers the CERT Certificate in Cybersecurity Oversight, a tangible credential that demonstrates a commitment to cybersecurity literacy.[39]
NACD Board Advisory Services®: NACD offers in-boardroom education, board assessments, governance reviews, board composition and succession planning, ongoing advisory services, and cyber- risk -reporting to deliver industry-leading insights and analysis to boards.[40]
NACD Center for Inclusive Governance® (CFIG): In 2021, NACD launched the NACD Center for Inclusive Governance to address the need for boards to diversify and ensure that the new and diverse voices on boards are heard. CFIG supports these directors through leadership, events, and credentialing with a goal to create an environment that embraces equity and welcomes new perspectives in the boardroom.[41]
Future of the American Board: A Framework for Governing into the Future: The report gives the full board and committees a clear road map and implementation guidance for building high-performance governance in the face of the most influential trends shaping society and transforming businesses.[42]
Blue Ribbon Commission: Each year, NACD leverages the perspectives and experience of its more than 24,000 members, and appoints a Blue Ribbon Commission, an experienced collective of directors, investors, subject-matter experts, and leading governance professionals. The Commission engages in an extensive process to examine and develop recommendations and tools to address the most challenging issues facing boards. Blue Ribbon Commission Reports (BRCs) have been strengthening corporate governance for three decades.[43]
NACD Director Compensation Report: analyzes annual pay levels and practices among 1,400 companies across 24 industries with revenue from $50 million to more than $10 billion. NACD and Pearl Meyer annually release the NACD Director Compensation Report.[44][45]
Annual Governance Surveys: annual surveys of more than 1,000 public, private and nonprofit directors on leading governance practices.[46][47]
NACD Directorship® magazine: the official magazine of NACD, reporting on current issues of importance to directors and boards.[48]
NACD Director Essentials: guidance on issues such as cyber-risk oversight, corporate sustainability, effective director onboarding practices and other topics.[49][50]
In 2001 and 2002, the unexpected bankruptcies of Enron[51] and WorldCom[52] brought increased public and government attention to corporate governance and the role of the board of directors. In February 2002, Roger Raber, former CEO of NACD, was called to testify before the House Energy and Commerce Committee, chaired by Billy Tauzin (R-LA), regarding the failure of Enron Corporation.[53] At the request of Committee, Raber submitted 10 suggested standards, based on the Report of the NACD Blue Ribbon Commission on Director Professionalism (1996/2001/2005), for public company governance, submitting the same to the New York Stock Exchange (NYSE) and the NASDAQ on May 1, 2002. In November 2003, the Securities and Exchange Commission approved new listing requirements for both, which were influenced by NACD's recommendations.
Boards should be composed of a substantial majority of independent directors. At a minimum, these directors should meet the definition of “independent director” as defined under relevant SRO standards, although boards may consider adopting even more stringent standards of independence. Furthermore, boards should formulate and adhere to clear conflict of interest policies applicable to all board members.
Boards should require that key committees—including but not limited to audit, compensation, and governance/nominating—be composed entirely of independent directors, and are free to hire independent advisors as necessary.
Each key committee should have a board-approved written charter detailing its duties. Audit committee duties, at a minimum, should include two key elements: a) oversight of the quality and integrity of financial reports and the process that produces them; b) oversight of the management of risk. Compensation committee duties should include performance goals that align the pay of managers with the long-term interests of shareholders. Governance/nominating committee duties should include setting board and committee performance goals and nominating directors and committee members with the qualifications and time to meet these goals.
Boards should consider formally designating an independent director as chairman or lead director. If they do not make such a designation, they should designate, regardless of title, an independent member to lead the board in its most critical functions, including setting board agendas with the CEO, evaluating CEO and board performance, holding executive sessions, and anticipating and responding to corporate crises.
Boards should regularly and formally evaluate the performance of the CEO, other senior managers, the board as a whole, and individual directors. Independent directors should control the methods and criteria for this evaluation.
Boards should review the adequacy of their companies’ compliance and reporting systems at least annually. In particular, boards should ensure that management pays strict attention to ethical behavior and compliance with laws and regulations, approved auditing and accounting principles, and with internal governing documents. In addition to meeting the current requirements for disclosure of management compensation, boards should disclose the total value of each director's compensation, including the value of any stock options or grants awarded during the year.
Boards should adopt a policy of holding periodic sessions of independent directors only. These meetings should provide board and committee members the opportunity to react to management proposals and/or actions in an environment free from formal or informal constraints.
Audit committees should meet independently with both the internal and independent auditors.
Boards should be constructively engaged with management to ensure the appropriate development, execution, monitoring, and modification of their companies’ strategies. The nature and extent of the board's involvement in strategy will depend on the particular circumstances of the company and the industry or industries in which it is operating.
Boards should provide new directors with a director orientation program to familiarize them with their companies’ business, industry trends, and recommended governance practices. Boards should also ensure that directors are continually updated on these matters.
NACD and the Securities and Exchange Commission[edit]
2003-2004 Former NACD CEO Roger Raber and former NACD Chair B. Kenneth West co-signed three letters on Re: File Number S7-19-03 “Security Holder Director Nominations” (34-48626).[55][56][57] During this time NACD Board member Warren Batts appeared at an SEC Roundtable devoted to the topic.[58]
2005- 2006 NACD Director Michelle Hooper wrote a letter[59] and participated twice at SEC-PCAOB Roundtables[60][61] regarding internal control reporting and auditing provisions of Section 404 of the Sarbanes-Oxley Act. Another NACD Director, the Barbara Hackman Franklin, has similarly participated, under her own name, rather than as an NACD representative.[62]
2009 NACD President and CEO Ken Daly and Chair Barbara Hackman Franklin co-signed a letter to Elizabeth Murphy, Secretary of the U.S. Securities and Exchange Commission, commenting on the proposed rule on proxy disclosure and solicitation enhancements.[63]
2011 NACD President and CEO Ken Daly testified before the U.S. House of Representatives Subcommittee on Capital Markets and Government Sponsored Enterprises, commenting on the legislative proposals to address the negative consequences of the Dodd-Frank whistleblower provisions.[64]
2013 NACD President and CEO Ken Daly and Chair Reatha Clark King co-signed a letter to Elizabeth Murray, Secretary of the U.S. Securities and Exchange Commission, commenting on the proposed rule for pay ratio disclosure, issued by the SEC on September 18, 2013.[65]
2022 NACD President and CEO Peter Gleason signed a letter to Vanessa A. Countryman, Secretary of the U.S. Securities and Exchange Commission, commenting on the proposed rules for cyber risk management, issued by the SEC on March 9, 2022.[66]
2022 NACD President and CEO Peter Gleason signed a letter to Vanessa A. Countryman, Secretary of the U.S. Securities and Exchange Commission, commenting on the proposed rules for climate leadership in the boardroom, issued by the SEC on March 21, 2022.[67]
