The National Association of Corporate Directors, in partnership with Marsh & McClennan Companies, has published a report outlining a practical approach to advancing board oversight of digital transformation and emerging technologies.

The report is available by downloading from the NACD website at no charge.

“This report includes fresh, primary research and one-on-one interviews with leading directors and experts and identifies five foundational principles that will help directors navigate the complexities of artificial intelligence, blockchain, the Internet of Things, robotics process automation and more,” the organization says on its website. “Each principle includes specific recommendations to help directors avoid potential pitfalls, spot red flags, and formulate and adopt a more cohesive oversight approach.”

Download the report.

General Electric has announced a shakeup that’s unusual in corporate America, disclosing an overhaul to its board that included the departure of eight directors, the nomination of three new members and an eventual change next year in its independent lead director, The Washington Post reports.

“The announcement, which follows a precipitous fall in its share price in recent months and weeks of troubling headlines for investors, was first discussed by new CEO John Flannery in November and had been expected,” writes reporter Jena McGregor. “If shareholders approve the nominees, the industrial giant will have just 12 directors — far closer to the average size board and 33 percent smaller than the 18-member board it had a year ago.”

She adds that the revamp is an example of the kind “of overhaul advisers on governance and board recruitment say is extremely rare, if well overdue at the embattled company.”

Read the Post article.

The National Association of Corporate Directors has published its 2018 Governance Outlook and made it available for downloading at no charge.

The report provides perspective on the trends, issues, and risks that will command the board’s attention this year.

“Perhaps the biggest challenge for directors right now is deciding where to focus their attention,” the NACD says on its website. “Both risks and opportunities are proliferating at a bewildering pace. How can boards and directors make the most of their limited time?”

The report includes:

• a summary of directors’ priorities from the 2017–2018 NACD Public Company Governance Survey;
• an assessment of the future of risk management from Grant Thornton LLP;
• a look at the forces driving change in board composition and succession;
• an alert to an often-overlooked liability risk: failing to reveal pertinent information;
• new trends in D&O exposures; and
• insight into workforce disruption, cyber-risk reduction, and other risks.

Download the report.

The evolving digital landscape continues to challenge many sitting directors with the various transformation and security issues it presents, according to Boardroom Resources. Boardroom discussions can no longer ignore the rise of the digital consumer, which has begun to affect industries far beyond just retail or business-to-consumer. These challenges are accompanied by many opportunities for directors to improve board and company performance.

In a video, Alex Schmelkin, board member with Essendant and founder & CEO of Cake & Arrow, is given an interesting task: If you could design a digital training program for today’s board members, what would it look like? Host TK Kerstetter asks Schmelkin how he would both define ‘digital’ and communicate its current and future impact for today’s directors.

In the video discussion, Schmelkin outlines several approaches that boards can take to better understand the “end user” no matter the organization or industry.

Watch the video.

The National Association of Corporate Directors will present a complimentary webinar on reassessing the evaluation process on evaluations on director performance. The event will be Thursday, March 23, at 2 p.m. EDT.

“Given the increased emphasis on director performance, board evaluations have become commonplace in the boardroom over the last few years,” NACD says on its website. “The benefits of the evaluation are clear, including improving performance around identified opportunities, reviewing board composition relative to strategy, and communicating board effectiveness more effectively to shareholders. It is important, however, to periodically reassess the evaluation process to incorporate new leading practices and prevent complacency.”

Presenters will discuss how other boards:

• Align their evaluation process with the company’s strategy
• Incorporate peer-to-peer reviews
• Keep board members engaged in the evaluation process

Register for the webinar.

Join Our LinkedIn Group

The National Association of Corporate Directors has published the 2017 edition of the NACD Director’s Handbook on Cyber-Risk Oversight and made it available for free downloading.

The book is constructed around five core principles designed to enhance the cyber literacy and cyber-risk oversight capabilities of directors of organizations of all sizes and in all industries, according to NACD.

This handbook provides

• foundational principles for board-level cyber-risk oversight;
• insight into management of cyber-risk oversight responsibilities; and
• tools to improve and enhance boardroom practices.

Download the handbook.

The National Association of Corporate Directors will present a complimentary webinar discussing how progressive general counsel use the board evaluation process as a tool to effect positive change in the boardroom.

The webinar is part of NACD’s Strategic-Asset General Counsel Webinar Series.

The event will be March 23, 2017, 2-3 p.m. Eastern time.

Board evaluation will be the main topic for the NACD webinar.

Speakers will be announced closer to the event date.

Register for the webinar.

The National Association of Corporate Directors has published the 2016 NACD Blue Ribbon Commission Report: Building the Strategic-Asset Board. The report is designed to help readers prepare for boardroom discussions on top-of-mind issues related to board strategy and composition.

The NACD says this report, based on the recommendations of leading directors, investors, and subject matter experts, outlines steps corporations and general counsel can take to help the board continuously improve boardroom performance, including how to

• make relevant updates to your governance principles;
• plan board succession in line with the company’s long-term strategy; and
• consider tenure issues as part of your director review process.

The full report is available exclusively to NACD members, but the executive summary, which includes a list of additional recommended steps for building a strategic-asset board, is available to anyone.

Download the summary.

Image by firedoglakedotcom

As John G. Stumpf, the chief executive of Wells Fargo, prepares to face a congressional tribunal on Thursday for the second time in two weeks, questions are intensifying about the bank’s sham accounts scandal and its lethargic response to it, reports The New York Times.

The company announced late Tuesday that Stumpf would forfeit approximately $41 million worth of stock awards, forgo his salary during the inquiry and receive no bonus for 2016.

“The Wells Fargo board also announced the immediate retirement of Carrie L. Tolstedt, the former senior executive vice president of community banking, who ran the unit where the fake accounts were created,” writes Gretchen Morgenson of The Times. “She will forfeit $19 million in stock grants, will receive neither a bonus for this year nor a severance, and will be denied certain enhancements in retirement pay, the board said.”

Read the article.

The Center for Board Excellence is offering for free download a checklist aimed at modernizing directors and officers questionnaires. The checklist uses CBE’s cloud-based platform.

A company spokesman explained that the D&O form is uploaded by CBE to its secure platform and then is accessible from anywhere on any device.

Users can customize the questionnaire for respondents with prepopulated information. The number of questions can be reduced, providing for easier director completion.

And definitions and schedules are converted to dynamic flyovers or online links.

Download the questionnaire checklist.

The National Association of Corporate Directors has made available a free executive summary of “Director Essentials: Strengthening the Oversight of M&A.”

“With more than 40,000 mergers and acquisitions transacting annually, boards need to stay up to date on trends,” the company says on its website.

“Director Essentials: Strengthening the Oversight of M&A” is designed to help general counsel:

• provide guidance on director responsibilities;
• develop parameters for M&A review; and
• prepare directors to ask management the right questions.

The full publication is available exclusively to NACD members, but anyone may download a complimentary copy of the executive summary.

Download the summary.

In response to continued M&A activity, the National Association of Corporate Directors has prepared a guide to board oversight of mergers and acquisitions. The handbook describes the current M&A climate and suggests questions to ask and resources to deploy at every step in the M&A transaction process, from strategy to post-merger integration, according to Steve Kalan, NACD director of business development.

The full publication is available exclusively to NACD members, but a complimentary executive summary is available to everyone for downloading.

“With merger and acquisition activity continuing to shift the business landscape, directors can benefit from learning the size and scope of this trend and how it relates to their board responsibilities,” NACD says on its website. “Director Essentials: Strengthening Oversight of M&A summarizes current M&A trends and guides directors in considering M&A as a strategic option. It will help directors fulfill their roles throughout the M&A process, from strategy to integration. Aimed primarily at public company directors, this report is also useful for fiduciaries of nonprofits and privately owned companies.”

Download the summary.

A widening criminal probe casts new light on a bitter defeat hedge fund activist Bill Ackman suffered in his 2009 bid for board seats at U.S. retailer Target Corp, Reuters is reporting.

Target for years has paid proxy solicitor Georgeson LLC to track the votes of its top investors, writes Ross Kerber. Now five current and former Georgeson employees have been charged with fraud for using bribes to get advance voting information on proxy battles.

“The same tactics cited in the criminal complaint were used to help Target defeat Ackman in 2009, according to a former Georgeson employee turned whistleblower. Ackman, who runs hedge fund Pershing Square Capital Management, failed in the high-stakes battle to install his own slate of directors at Target and change its business direction,” according to the report.

The whistleblower told Reuters that he told regulators about alleged bribes that were being used to gain advance access on how investors were voting.

Read the article.

The National Association of Corporate Directors (NACD) recently released Director Essentials: Preparing the Board for Shareholder Activism and provides an executive summary of the report for free download.

As year-round shareholder activism becomes the new norm in the American boardroom, directors are called upon to prepare for and respond to any possible activist challenges, the NACD reports. The new publication is designed to equip directors with the knowledge and tools they need to address this challenge.

This report includes information on trends in activist campaigns, types of investors and their methods of influence, and the board’s role in preparing for and responding to an activist campaign.

The full publication is available exclusively to NACD members, but the executive summary is freely available.

Download the executive summary.

The Center for Board Excellence is offering a free whitepaper that describes moving the directors and officers questionnaire process to a dynamic online system.

CBE says the paper explains how to save time and money by moving the D&O questionnaire online to:

• Reduce the number of questions
• Make them easier to follow and answer
• Turn definitions and schedules into dynamic flyovers or online links

“Focus particularly on the cost of your Directors’ and Officers’ time,” CBE suggests. “How much time did it take them to complete the process? How many irrelevant questions did they have to read and skip over? How many definitions did they have to look up in an appendix? Add to that the time it took you to compile the questionnaire and parse the results only to find that three forms came back incomplete.”

Download the paper or request a demo.

The amount of time board directors spend on their work and commit to strategy is rising, but in a new McKinsey Global Survey, few respondents rate their boards as effective at most tasks or report good feedback or training practices, according to an article on McKinsey’s website.

“Directors say they dedicate more time now to their board duties than ever before and that, since 2011, they’ve cut in half the gap between the actual and ideal amount of time they spend on board work,” the report says. “In the newest McKinsey Global Survey on corporate boards, the results confirm that strategy is, on average, the main focus of many boards. Yet directors still want more time for strategy—more than any other area of their board work—when they consider its relative value to their companies.”

Read the article.

The National Association of Corporate Directors (NACD) has published for download “How to Ensure Organizational Resiliency,” a featured article in the latest issue of NACD Directorship magazine.

The article explores what directors think boards can do to ensure a company’s survival — despite high rates of business failure.

NACD Directorship magazine, a leading source of boardroom intelligence and corporate governance information for board directors, is an exclusive benefit of NACD membership, but General Counsel News readers are invited to download a complimentary copy.

Download the article.

In a new on-demand video, TK Kerstetter, host of “Inside America’s Boardrooms,” reviews three areas where many boards can improve their performance and effectiveness. Topics include board composition & leadership, board evaluations, and shareholder engagement.

Kerstetter also discusses PwC’s recent Annual Corporate Directors Survey, which reported that 39 percent of directors feel that at least one fellow board member should be replaced.

Ty Francis, EVP & Group Publisher of the Ethisphere Institute, joins in the discussion.

Watch the video.

One in three U.S. board members and executives are “very concerned” that the climate of uncertainty and volatility may pose a significant threat to their corporate strategy, and more than three in four worry that management tends to use outdated assumptions in setting strategy, according to a survey by the Board Leadership Center of KPMG LLP, the audit, tax and advisory firm.

KPMG’s latest Roundtable Series gathered over 1,200 corporate directors and senior executives across 17 cities to share their views on the board’s role in calibrating strategy. Thirty-two percent of those surveyed said they are “very concerned” that management tends to use “more of the same” assumptions regarding key factors and uncertainties in setting strategy, and another 46 percent said they are “somewhat concerned.”

Survey respondents ranked economic uncertainty (61 percent), technology and innovation (58 percent), and government regulation (57 percent) as having the most significant impact on the company’s strategy or the assumptions underlying it.

Read the article.

“How to Ensure Organizational Resiliency,” a featured article in the latest issue of NACD Directorship magazine, explores what directors think boards can do to ensure a company’s survival — despite high rates of business failure.

NACD Directorship magazine is an exclusive benefit of membership in the National Association of Corporate Directors, but NACD has made this article available without a subscription.

The article discusses roundtables co-hosted by NACD and Dentons to explore directors’ perspectives on what contributes to the resiliency of an organization.

Prior to the dinners in Scottsdale, Chicago, and New York, each group of the invited directors was asked to consider the following questions:

• What is the board’s role in assessing threats, determining responses, and in educating or monitoring employees?
• How are risks presented to the board by management?
• How are risk assumptions challenged?
• How does the board approach the identification of new risks?
• What are the common threads running through business failures such as Arthur Andersen, Barings Bank, Enron, Lehman Bros., and others, and what can be learned from them?
• How do you assess insider threats?

Read the article.