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.
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.
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: