The NACD yesterday released a detailed report urging boards to overhaul risk oversight, corporate strategy, executive compensation, and investor communications.

“The only folks who can fix corporate America are the directors,” NACD President Kenneth Daly said in an interview with the WSJ. “Boards are really trying to do a good job. But they aren’t all doing a great job in all areas.”

Some governance experts believe that results are what will restore investor confidence. “The public wants to see good results, not just good principles,” said Lucian Bebchuk, a Harvard Law School professor and head of its corporate-governance program.

Not surprisingly, the report suggests boards avoid “exorbitant” compensation by grooming internal candidates for positions such as CEO. Only 36 percent of public companies have a plan for developing internal CEO candidates, according to an NACD survey last year of 703 directors concluded.

The NACD report urges companies to review their size and make up to ensure their company’s strategic direction coincides with the company’s size and makeup.

Barbara Hackman Franklin, chairman of NACD’s board and a director at Aetna and Dow Chemical, said boards in general are functioning more effectively today and are more independent than they were before the Enron and WorldCom scandals. Franklin said boards need to reevaluate themselves amid diminished public confidence in Corporate America.

“We’re not telling boards how to do some of these things,” she told Reuters. “We’re just telling them what the principles ought to be.”

The review of Compensation Discussion and Analysis (CD&A) reports of Fortune 500 companies by Equilar found an increase in the prevalence of companies that considered accumulated wealth when determining executive pay levels from 8.4 percent in 2006 to 14.5 percent in 2007.

For key board leadership positions, Equilar found that median total board-level compensation for non-executive chairs at Fortune 500 companies increased from $258,500 in 2006 to $264,000 in 2007.

Other findings:

• For lead directors, median total compensation increased from $174,843 to $189,413 over the same period. 
• The prevalence of Fortune 500 companies with independent board leadership positions grew from 78.4 percent to 80.9 percent.
• In 2007, 71.7 percent of non-executive chairs and 45.8 percent of lead directors at Fortune 500 companies received a pay premium over regular board members not holding a leadership role.

Companies that consider accumulated wealth in the study included Halliburton, ManPower, Big Lots, Rockwell Automation, Dillards, and Aetna.