USA: NACD publishes principles to strengthen corporate governance

The National Association of Corporate Directors has published a document titled "Key Agreed Principles to Strengthen Corporate Governance for US Publicly Traded Companies". The introduction states that boards and shareholders are encouraged to use the Principles when designing and evaluating companies' governance structures. The Principles are as follows (see the NACD document for elaboration):

1. Board responsibility for governance: Governance structures and practices should be designed by the board to position the board to fulfill its duties effectively and efficiently.
2. Corporate governance transparency: Governance structures and practices should be transparent— and transparency is more important than strictly following any particular set of best practice recommendations.
3. Director competency and commitment: Governance structures and practices should be designed to ensure the competency and commitment of directors.
4. Board accountability and objectivity: Governance structures and practices should be designed to ensure the accountability of the board to shareholders and the objectivity of board decisions.
5. Independent board leadership: Governance structures and practices should be designed to provide some form of leadership for the board distinct from management.
6. Integrity, ethics and responsibility: Governance structures and practices should be designed to promote an appropriate corporate culture of integrity, ethics, and corporate social responsibility.
7. Attention to information, agenda and strategy: Governance structures and practices should be designed to support the board in determining its own priorities, resultant agenda, and information needs and to assist the board in focusing on strategy (and associated risks).
8. Protection against board entrenchment: Governance structures and practices should encourage the board to refresh itself.
9. Shareholder input in director selection: Governance structures and practices should be designed to encourage meaningful shareholder involvement in the selection of directors.
10. Shareholder communications: Governance structures and practices should be designed to encourage communication with shareholders.
    

Note: the Principles were unveiled on October 20, day two of the NACD's corporate governance conference. They have been described by the International Corporate Governance Network as a "good start which we believe should encourage further discussion on how to improve practice in corporate governance and develop much better understanding between companies and the shareholders who own them".