Re-Reading NACD Guidelines: Like "Duh"

Last Updated Oct 24, 2008 10:32 AM EDT

A few days ago, I posted an item about a 10-point guideline package recommended by the National Association of Corporate Directors (NACD) to boost sagging confidence in business.

After reading through the NACD recommendations more thoroughly, a few thoughts come to mind.

First, some of the points are obvious such as calling for boards to be transparent, competent, independent and ethical. These remind me of the Boy Scouts when I was a troop member in the hills of West Virginia back in the mid 1960s although I never got past the second class level.

What strikes me is what the NACD does not say. It takes no position on such nettlesome corporate governance issues as whether shareholders should have the right to nominate their own director candidates.

Instead, NACD merely states the obvious: "Shareholders have a legitimate interest in the governance of their companies." Plus, "the board should carefully consider critical, non-binding proxy proposals that attract significant support from shareholders." Note here that the proposals are "non-binding" so they don't have any clout anyway.
"Executive compensation is an issue of particular concern for many shareholders." No argument there. "The board and the compensation committee should consider ways for shareholders to communicate their views. . ." Of course, they should so long as they have no real say or power.
On second reading, I wonder if I'm being made a game of by the NACD.