A set of principles set forth by the National Association of Corporate Directors (NACD) has won the favor of Proxy Governance, Inc. (PGI), a prominent independent proxy advisory firm. PGI gave its official endorsement to the principles set forth by the NACD, citing their straightforwardness, and calling upon other governance communities to treat them as guidelines for corporate conduct.
The principles, labeled “Key Agreed Principles to Strengthen Corporate Governance for U.S. Publicly Traded Companies,” were released on October 16 and consist of ten maxims that boards should follow for continued success. These include obligations to board responsibility, transparency, and accountability, for example the sixth principle that asserts “Assessment of management performance and integrity are at the heart of effective governance, and should factor into all board decisions.”
In lauding the NACD’s efforts, PGI president and COO Michael J. Ryan, Jr., claimed that the principles encourage boards to think outside the box, and were developed “to help shareholders and boards avoid rote approaches to corporate governance.” In lending his firm’s endorsement, Ryan called on investors and other governance institutions to “implement the Principles, and to treat them as the first step in ongoing corporate governance reform.”
The National Association of Corporate Directors is a non-profit organization built to assist and advise the decision-making of corporate boards and their individual directors. The Association, founded in 1977, has 10,000 members.