Leadign the way

The NACD Key Agreed Principles

The National Association of Corporate Directors (NACD) believes that boards seeking ways to improve board performance and corporate oversight need a new, principles-based framework for making governance decisions.

In 2008, as the nation’s financial crisis unfolded, NACD took the lead and convened directors, the business community and investor groups to create a new framework for strengthening governance. NACD, The Business Roundtable and the Council of Institutional Investors collaborated to distill and articulate the fundamental principles on which there was broad consensus.

NACD then released the result: the Key Agreed Principles to Strengthen Corporate Governance for U.S. Publicly Traded Companies.


The Principles:

  • Are the cumulative effort of many organizations and individuals to find a truly shared set of ideas to improve the functioning of America’s boardrooms.
  • Provide a blueprint for boards to improve the quality of discussion and debate about governance issues.
  • Are not a one–size–fits–all solution, but rather an agreed–upon framework. Boards have the flexibility to make decisions at the practice level within that framework.
  • Can be used by boards with confidence because they represent areas where board, shareholder and management organizations already have agreed.

NACD views these Principles as a first step in strengthening corporate governance and encourages all boards to use them as a framework for reviewing their governance practices. See the Step-by-Step Guide and Resources to get started.

NACD will continue through a national effort to identify and advocate leading practices that empower board leadership within the context of the Principles.

NACD would like to acknowledge the extraordinary and pro bono efforts of Ira Millstein, Holly Gregory, and their colleagues at Weil, Gotshal & Manges LLP for their analysis of corporate governance best practices and identification of the commonalities that were the basis for the NACD Key Agreed Principles.

Key Agreed Principles Summary

Principle I: Emphasizes that every board needs to design its own governance structure and practices

Principle II: Emphasizes the importance of transparency in explaining how those structures and practices have been tailored to meet the boards’ own needs

Principles III-X: Describe the key fundamentals to consider when designing and explaining board structures and practices, including:

  • Competency & Commitment
  • Accountability & Objectivity
  • Independent Board Leadership
  • Integrity, Ethics, & Responsibility
  • Information, Agenda, & Strategy
  • Protection Against Entrenchment
  • Shareholder Input in Director Selection
  • Shareholder Communications

Download the Key Agreed Principles

NACD White Papers

White Papers Series I

  1. Risk Oversight
  2. Transparency
  3. Strategy
  4. Executive Compensation

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