National Association of Corporate Directors

Last updated
National Association of Corporate Directors
FoundedDecember 19, 1977;46 years ago (1977-12-19)
TypeNational Director Membership Organization
FocusDirector education, board development, director recruitment services, credentialing
Location
Area served
Nationwide
MethodPublic, private, and nonprofit company surveys, educational events, conferences, publications
Members
24,000+
Key people
Peter Gleason, Kimberly Simpson, Friso van der Oord, Tracy Gee, Sue Cole
Website www.nacdonline.org

The National Association of Corporate Directors (NACD) is an independent, not-for-profit, section 501(c)(3) founded in 1977 and headquartered in Arlington, Virginia. NACD's membership includes more than 1,750 corporate boards as well as several thousand individual members, for a total of more than 24,000 members. [1] Membership is open to individual board members and corporate boards of public, private, and nonprofit organizations from both the United States and overseas. [2]

Contents

NACD and a network of more than 20 chapters across 35 U.S. locations provide a peer-to-peer network and education and learning through live and virtual events. Together, NACD and the Chapter Network engage directors looking to cultivate meaningful peer relationships, share real-world experiences and build their knowledge. [3]

NACD is a founding member of The Global Network of Director Institutes (GNDI). [4] Formed in 2012 to enhance collaboration among its members, GNDI provides directors and their boards with access to a wide array of global resources. The network includes 24 institutes and represents over 150,000 directors and governance professionals. [5]

The organization collaborates with various industry leaders such as KPMG International, Sidley Austin, Pearl Meyer, Russell Reynolds Associates, and many more to provide directors with impactful information and data on the topics and practices they value most in corporate governance and board leadership. [6] [7]

History

NACD was founded in 1977 with the goal to educate directors. In 1978 it announced the first comprehensive Director Education Program. Ten years later, NACD recognized the first Director of the Year. [8] [9] In 1993, NACD published its first Blue Ribbon Commission Report, offering ten principles to guide audit committees and their oversight of financial reporting as well as risk management and internal and external auditors. [10] In the early 2000s, NACD's Blue Ribbon Commission Report on Board Evaluations helped optimize board composition, while the organization helped shape Sarbanes-Oxley and influence the new New York Stock Exchange (NYSE) and NASDAQ listing rules. [9] In 2004, NACD co-founded the Global Director Development Circle, launched in response to the need to keep directors ahead of international corporate governance and legislation. [11] This program led NACD to globalize the Certificate of Director Education program in 2006. The program has since evolved into the Global Network of Director Institutes. [12] In 2010, NACD acquired Directorship magazine, a magazine dedicated to today's corporate officers and board of directors. [9] [13]

In 2020, NACD launched the NACD Directorship Certification® program, the premier board member certification in the United States. [14] As the nation's premier director accreditation, it sets a new standard for director education and includes an ongoing education requirement that prepares directors for an ever-changing array of boardroom challenges.

In January 2022, NACD assembled a Commission of 19 experienced board leaders, investors, CEOs, academics, and former regulators to discuss how intensifying pressures and demands on boards will affect their governance in the coming years and how boards can best adapt their workings. [15] The result of the intensive work of the Commission is The Future of the American Board: A Framework for Governing into the Future. The publication was released in October 2022. [16]

Mission and Vision

NACD's mission, as stated on its website, is "We empower directors and transform boards to be future ready." And their vision is that corporate boards are recognized as trusted catalysts of economic change - in business and in the communities they serve. [17]

Advocacy

NACD is the independent, trusted voice of the corporate director, helping directors achieve better governance and better business. [17] It provides educational advocacy and is a valuable resources to policymakers and regulators that have a role in helping corporate directors achieve good governance and create trust in capital markets. NACD's relationship with policymakers and regulators creates two-way engagement and information sharing and helps it meet its mission to empower and transform boards to be future ready. NACD does not lobby nor make political donations.

NACD has long-standing relationships with the U.S. Securities and Exchange Commission (SEC), Public Company Accounting Oversight Board (PCAOB), key enforcement agencies such as the Federal Bureau of Investigation (FBI) [18] and others like the Cybersecurity and Infrastructure Security Agency (CISA). [19] These relationships have created opportunities for NACD to inform the board director community and reinforce that corporate boards are trusted stewards and catalysts of economic growth and opportunity, and long-term value creation.

NACD submitted a comment letter to the FDIC in 2024 expressing concern that proposed governance and risk management standards could create many unintended consequences beyond the banking system. [20] In 2023, it submitted a letter to the PCAOB's NOCLAR proposal that raised concerns that the proposal would have substantial impact and costs (without commensurate benefits) on audit committees' duties and responsibilities and that it would drastically change the current model of work for audit committees, management, and auditors. [21] In 2022 NACD commented on the SEC's cybersecurity risk management proposal and climate disclosure proposal, agreeing with the intent of the proposed rules and emphasizing its support for consistent disclosure while calling out the potential impacts of new rules on the board and governance. [22]

In both cases, the SEC incorporated NACD feedback on the concept of single-issue directors. In both final rules, the requirement to identify the individual experts on the board was dropped. Also, the SEC incorporated NACD feedback on the role of the board versus management, as they cited in the final climate disclosure rule.

Courses and Events

NACD delivers more than 400 programs nationwide to 24,000+ directors each year. [23] These include national and chapter events, foundation courses, the annual NACD Directors Summit, peer-to-peer roundtables, specialty events, and online learning opportunities. [23]

NACD Directors Summit

NACD Directors Summit is an annual event for members where the most influential minds in governance gather to advance board effectiveness. It's an experience that celebrates opportunity and positive change in boardrooms, and the event attracts thousands of professionals. [24]

Special events

NACD specialty programming includes signature annual events and new programming to reflect emerging trends in the directorship field. [25] These events include NACD Directorship 100, [26] NACD DE&I Awards, [27] and From Battlefield to Boardroom. [28]

Foundation courses

NACD offers director education courses as the foundation of their primary credential, NACD Directorship Certification. [29] The former NACD Fellowship® was phased out in 2023. [30]

Virtual Director Professionalism® is the prerequisite course for certification and provides directors with boardroom fundamentals. [31]

Virtual learning

NACD's virtual learning programs offer comprehensive education for current and aspiring boardroom leaders. Programs include webinars, Directorship Essentials series, and the Art of Directorship series. [32]

Peer-to-peer programs

NACD offers various peer-to-peer programming events throughout the year. [33] Programs include Advisory Councils, [34] General Counsel programming, [35] and Chapter programs. [3]

Credentials

NACD enables directors to earn credentials that demonstrate a commitment to continuous learning and board leadership. NACD aims to help directors stay ahead of emerging issues and connect with a distinguished network of NACD-credentialed directors. [36]

NACD Directorship Certification

NACD's directorship certification is the premier US-based certification program designed to qualify corporate directors for effective boardroom performance. Based on a professional examination and continuing education, this certification verifies that directors possess the knowledge, expertise, and skills needed to discharge their fiduciary responsibilities as board members. [29] As the leading director credential in the United States, the Certification program provides rigorous governance content, comprehensive preparation, and a credentialing exam to ensure those who hold the credential possess the core competencies required of an effective board professional. Earning the NACD.DC designation demonstrates commitment to governance leadership and personal development, as well as commitment to leading oversight of organizations today and in the future. [37]

Cyber-Risk Oversight Certificate

NACD has partnered with the CERT Division of the Software Engineering Institute at Carnegie Mellon University and Ridge Global to develop the Cyber-Risk Oversight Program. [38] This program is designed for directors who wish to enhance their understanding of enterprise cyber-risk issues. The course confers the CERT Certificate in Cybersecurity Oversight, a tangible credential that demonstrates a commitment to cybersecurity literacy. [38]

Governance Resources

Role in the corporate governance movement

In 2001 and 2002, the unexpected bankruptcies of Enron [50] and WorldCom [51] brought increased public and government attention to corporate governance and the role of the board of directors. In February 2002, Roger Raber, former CEO of NACD, was called to testify before the House Energy and Commerce Committee, chaired by Billy Tauzin (R-LA), regarding the failure of Enron Corporation. [52] At the request of Committee, Raber submitted 10 suggested standards, based on the Report of the NACD Blue Ribbon Commission on Director Professionalism (1996/2001/2005), for public company governance, submitting the same to the New York Stock Exchange (NYSE) and the NASDAQ on May 1, 2002. In November 2003, the Securities and Exchange Commission approved new listing requirements for both, which were influenced by NACD's recommendations.

The ten core recommendations are as follows: [53]

NACD and the Securities and Exchange Commission

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References

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  2. ↑ "NACD - Why Join? - NACD Membership". Nacdonline.org. Archived from the original on 19 October 2017. Retrieved 10 July 2017.
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  4. ↑ "GNDI Members". Global Network of Director Institutes. Retrieved 2024-05-29.
  5. ↑ "GNDI". Global Network of Director Institutes. Retrieved 2024-05-29.
  6. ↑ "Top Companies Reluctant to Increase Director Compensation". Forbes. Retrieved May 5, 2012.
  7. ↑ "Partner With Us". www.nacdonline.org. Retrieved 2020-10-21.
  8. ↑ "NACD Director of the Year". NACD. Retrieved 1 July 2012.
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  14. ↑ Directors, National Association of Corporate. "NACD DIRECTORSHIP CERTIFICATION® PROGRAM CELEBRATES 1,000 CERTIFIED DIRECTORS". www.prnewswire.com. Retrieved 2024-05-22.
  15. ↑ Directors, National Association of Corporate. "NACD LAUNCHES COMMISSION TO EXPLORE THE FUTURE OF THE AMERICAN BOARDROOM". www.prnewswire.com. Retrieved 2024-05-22.
  16. ↑ NACD. "NACD LAUNCHES THE FUTURE OF THE AMERICAN BOARD REPORT: A FRAMEWORK FOR GOVERNING INTO THE FUTURE". www.prnewswire.com. Retrieved 2024-05-22.
  17. 1 2 "About | NACD". www.nacdonline.org. 2023-05-24. Retrieved 2024-05-22.
  18. ↑ "The FBI and Corporate Directors: Working Together to Keep Companies Safe from Cyber Crime". FBI. October 1, 2018.
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  26. ↑ "Directorship 100". NACD Directorship 100 Gala. Retrieved 2020-10-21.
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  28. ↑ "2021 Battlefield to Boardroom". www.nacdonline.org. Retrieved 2020-10-21.
  29. 1 2 "NACD Directorship Certification®". NACD Certification. Retrieved 2020-10-21.
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  31. ↑ "Foundation Courses Overview". www.nacdonline.org. Retrieved 2020-10-21.
  32. ↑ "Virtual Learning Programs". www.nacdonline.org. Retrieved 2020-10-21.
  33. ↑ "Peer to Peer Programs". www.nacdonline.org. Retrieved 2020-10-21.
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  35. ↑ "General Counsel Overview". www.nacdonline.org. Retrieved 2020-10-21.
  36. ↑ "Credentials". www.nacdonline.org. Retrieved 2020-10-21.
  37. ↑ "NACD Directorship Certification | NACD". www.nacdonline.org. 2023-12-13. Retrieved 2024-05-22.
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  45. ↑ "CEO succession starts with developing your leaders". McKinsey & Company. Retrieved 10 July 2017.
  46. ↑ "When looking inside for your next CEO". Heidrick.com. Retrieved 10 July 2017.
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  53. ↑ "Recommendations to Congress". National Association of Corporate Directors. Archived from the original on October 25, 2007. Retrieved December 18, 2007.
  54. ↑ December 22, 2003
  55. ↑ March 9, 2004
  56. ↑ https://www.sec.gov/rules/proposed/s71903/nacd032604.pdf March 26, 2004
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