Last Updated Oct 22, 2008 10:45 AM EDT
So, the NACD has come up with a 10-point plan to help guide its members and restore respect.
The guidelines, proposed by NACD president and CEO Kenneth Daly, take governance to a new level. But they seem to fall short of backing many aspects of corporate democracy, such as direct shareholder nominations of director candidates.
Here are the NACD recommendations:
- Boards are responsible for governance and need to design structures to ensure it.
- Boards must be transparent.
- Boards must be competent.
- Boards should be accountable to shareholders and be objective in their outlook.
- Board independence is a crucial and directors must be free of management control.
- Boards need to promote a corporate culture of integrity, ethics and repsonsibility.
- Boards must be free to set their own agenda and "directors cannot be unduly reliant on management for determining the board's priorities and related agenda, and information needs."
- Measures are needed to prevent boards from becoming entrenched.
- Shareholders should be allowed to elect directors by a majority vote. If a director does not get a majority vote in an uncontested election, he or she should resign.
- Boards must pay attention to shareholders and carefully consider non-binding resolutions proposed by them.