In the spirit of a New Year’s “Auld Lang Syne,” permit me to wax nostalgic on the subject of corporate governance. Think back with me to your earliest days on boards. If you’re like me, you served on a student council or other group that used the tools of parliamentary procedure—including a standard agenda. Our meetings in those good old days had many long reports on “old business,” with a small, exciting moment at the very end devoted to “new business.”
Today, everything is new business. Boards are deeply engaged in strategy development and in risk oversight—and both activities look ahead, typically a good three years. So let me ask: Is your board ready for 2012? What about 2015? Whenever I ask directors this question, I usually hear a resounding “yes.”
To be sure, the past matters to directors. After all, it’s the only thing that’s verifiable, as any good accountant can tell you. But increasingly directors see the past as just one part of a vast puzzle that includes an ever-emerging future. As one chapter leader told us recently: “We’re Dodd-Franked out. Help us see what’s around the next corner.”
With this issue of NACD Directorship, we are indeed looking ahead. In her annual State of Corporate Governance address, NACD Chairman Barbara Hackman Franklin cites pay-for-performance, diversity and technology as key issues for boards in 2012.
The importance of these topics becomes clear to me whenever NACD convenes our regular advisory councils in each of the three key committee areas. Our council for compensation committee chairs regularly tackles the challenge of linking pay to performance. The subject of diversity brings out useful insights when we convene nominating/governance committee leaders. Last but not least, technology—especially the shifting risks and rewards of information technology—is always a hot topic for audit committee leaders.
And speaking of IT, check out our website, NACDonline.org. Type in any search term, and you will find literally hundreds of resources—in a nanosecond.
It’s all about the future. See you there!
Kenneth Daly is president and CEO of the National Association of Corporate Directors.