American Board Practices and Oversight Report

In brief: The American Board Practices and Oversight Report examines how directors, and the boards they serve, helmed a course through the multiple challenges that organizations faced in 2020.

Stemming from a recent NACD survey on COVID-19 board practices and trends, this report examines how boards navigated both the COVID-19 pandemic and the nation’s broad recognition of the need for corporate America to take action against systemic racism. In the report, you will find information about how boards reacted and where boards and corporate governance will go from here.

With this report, directors will gain valuable information that helps them to assess their board’s performance:

• Benchmark your board’s performance during the COVID-19 crisis against that of your board’s peers.

• Discover how boards approach and think about virtual meetings.

• Find out which steps boards have already taken in addressing systemic racism in their organization.

• Understand where current trends, such as digital transformation and ESG, are headed and how COVID-19 may impact them.

The focus on the board’s compensation committee has never been sharper. The components of compensation plans and the link between compensation and company performance are under intense scrutiny from shareholders, employees, policymakers, the media, and other stakeholders. The Report of the NACD Blue Ribbon Commission on the Compensation Committee revisits NACD’s 2003 Report of the NACD Blue Ribbon Commission on Executive Compensation to highlight the new environment in which compensation committees—and, more broadly, boards—are now operating. It recommends that the compensation committee and board work together to establish an executive compensation philosophy that supports the company in creating long-term, sustainable value.

The report includes ten specific recommendations for compensation committees to consider when evaluating their compensation philosophies. It also provides practical tools, such as sample compensation committee charters, a compensation committee assessment, and guidance on executive employment contracts.