NACD

Advancing exemplary board leadership
NACD’s Mission Statement

The National Association of Corporate Directors (NACD) 

identifies, interprets, and delivers insights on critical 

issues that shape board agendas. Through actionable 

resources, NACD enhances directors’ ability to fulfill 

their roles to enhance the value of the enterprise.

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Snapshot of NACD Membership

Members by company type:

• Publicly-traded: 73% 

• Privately-owned: 16%

• Not-for-profit: 10%

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Among NACD’s full-board members...

Top-represented industries among members:

• Banking and financial services

• Insurance (property & casualty, and life & health)

• Retail and consumer goods

• Energy and utilities

• Healthcare and pharmaceuticals
NACD’s Top-Requested Publications

NACD has been a premier source of corporate governance thought 

leadership. The most popular publications—aside from Blue 

Ribbon Commission Reports—include the following: 

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• Cyber-Risk Oversight Handbook, featured on the Department 

of Homeland Security’s website

• Annual Director Compensation Report, co-produced by 

NACD’s partner Pearl Meyer

• Annual Public Company Governance Surveys

• Annual Governance Challenges Report

• Dodd-Frank: Where Do We Stand?, a series of regulatory 

updates
NACD Blue Ribbon Commission (BRC) Reports

Drawing experience from directors and governance stakeholders, 

commissions propose recommendations on the thorniest boardroom 

issues of the day. BRC reports include:

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• Talent Development: A Boardroom Imperative (2013)

• Compensation Committee (2003, updated in 2007 and 2015)

• The Board and Long-Term Value Creation (2015)

• Performance Metrics: Understanding the Board’s Role (2010)

• Strategy Development (2014)

• The Diverse Board: Moving from Interest to Action (2012)
NACD Advisory Councils

These four councils convene Fortune 500 committee chairs with 

key shareholder representatives, regulators, and other 

stakeholders to discuss ways to strengthen corporate governance: 

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• Audit Committee Chair Advisory Council

• Nominating & Governance Committee Chair Advisory Council 

• Compensation Committee Chair Advisory Council

• Risk Oversight Advisory Council
Other NACD Multi-Stakeholder Forums 

NACD facilitates other forums to help targeted audiences understand 

corporate governance. 

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• Institutional Investors

– BlackRock, CalPERS, CalSTRS, Capital Group, Fidelity, State Street, 

TIAA-CREF, T. Rowe Price, and Vanguard

• Media Outlets

– Bloomberg BNA, CNBC, CNN Money, The Economist, Fox News, 

Huffington Post, MarketWatch, McClatchy, New York Times, Reuters, The 

Hill, Time Magazine, Wall Street Journal

• Government Officials

– Members of Congress, Federal Agencies, Regulators, Associations
BOARDROOM DIVERSITY

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Why Diversity Matters

A board’s performance relies on its understanding of the 

company and its operating environment. In today’s 

business landscape, the board cannot properly fulfill this 

responsibility without having directors who reflect the 

composition of its stakeholders, particularly its 

employees and customers. 

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From the 2012 Report of the NACD Blue Ribbon Commission on Diversity: 

Moving From Interest to Action
African-American

• 8.6% of directors were African-American in 2015, down slightly from 9.6% in 2010

• 75% of boards had at least one African-American director in 2015, compared with 82% of 

boards in 2010

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Current State of Board Diversity in the U.S. 

Findings from 2015 Spencer Stuart U.S. Board Index

Results are representative of S&P 500 companies

Hispanic/Latino

• 4.8% of directors were Hispanic/Latino in 2015, up slightly from 4.2% in 2010

• 47% of boards had at least one Hispanic/Latino director in 2015, compared with 44% of 

boards in 2010

Asian Descent

• 1.8% of directors were of Asian descent in 2015, up slightly from 1.3% in 2010

• 18% of boards had at least one director of Asian descent in 2015, compared with 15% of 

boards in 2010
Current State of Diversity in the U.S.

• Women make up about 20% of all directors.

• Nearly 75% of boards have at least two women directors.

• Among the S&P 500, 9% of all new independent directors were 

from outside the U.S., a decrease from 12% in 2014.

• Median age of directors is 63, up from 61 a decade ago

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From the S&P 500 in 2015

Source: Spencer Stuart U.S. Board Index 2015
State of Board Diversity in the U.S.

• U.S. lags behind many countries in % of women on boards:

– Norway: 40.1%

– Sweden: 33.7%

– France: 33.5%

– U.K: 26.0%

– Italy: 25.8%

– AUS: 20.4%

– U.S: 19.8%

– Companies lacking in board diversity tend to suffer more governance-related 

controversies than average. (MSCI Women on Boards Report 2015)

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Current Practice in the U.S.

• While directors and stakeholders agree on 

the importance of increasing boardroom 

diversity, progress—particularly in the 

United States—has been relatively slow 

(2016 BRC).

• The sluggish transition to more diverse 

boards has been antithetical to the pace of 

business, technology, and human progress 

in general (2012 BRC).

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Findings from NACD Blue Ribbon Commissions (BRCs) 
Current Practice in the U.S. 

• Boards largely rely on expanding their search criteria for new candidates in 

diversifying their composition

• Very few boards are adjusting tenure-limiting mechanisms or adopting formal 

quota to promote diversity.

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New Findings from NACD 2016-2017 Public Company Survey 
Current Practice in the U.S. 

• Boards of larger companies are far more likely than those of smaller companies to 

discuss the diversity of their members. 

• Half of the small-cap respondents say their boards did not discuss gender 

diversity in the past year, and most did not discuss racial/ethnic or age diversity. 

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Findings from NACD 2015-2016 Public Company Survey 
Global Snapshot: Australia

• Change brought about in a non-quota market 

• Australian Securities Exchange (ASX) 

– Called on boards to establish, measure, and annually report their diversity 

policies

– Enlisted KPMG to produce annual gender diversity compliance report

• Male Champions of Change—coalition of high-profile business 

men committed to increasing gender diversity and sharing 

leading practices

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Diversity on Boards Campaign, 2010-2015
Global Snapshot: United Kingdom

• Change brought about without a quota

• The Lord Davies Review—a government-backed commission examining 

underrepresentation of women on boards—set targets: 

– FTSE-100 target of 25% by 2015; now 25% target for FTSE 350

– Peer pressure – name and shame

– Executive Search Firms ‐ Enhanced Voluntary Code of Conduct

– Disclosure Rule – comply or explain

• Voluntary framework, led by business

– CBI—a not-for-profit, non-political membership association—pushed for change

– Group of UK board chairs and CEOs launched in 2010 set measurable goal for 

companies in the FTSE-100 

– Institutional investors pressured big businesses

– Board turnover (UK directors work under the assumption directors are no longer 

independent of management after 9 years)

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Diversity Campaign, 2011-2015
Global Snapshot: The Results

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Barriers to Boardroom Diversity

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Findings from NACD Blue Ribbon Commissions (2012 BRC) 

Structural Factors

• Absence of tenure-limiting mechanisms, such as term limits. 

– Solution: Preserve, enhance, or consider adding mechanisms to 

increase director turnover. 

• Small board sizes. 

– Solution: Consider expanding the board’s size.

• Inadequate use of evaluations as a tool for board turnover. 

– Solution: Give evaluations traction. 

• Inadequate use of executive talent management to develop 

directors from within. 

– Solution: Enhance executive talent management programs in order to 

expand the pool of diverse directors. 
Barriers to Boardroom Diversity

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Findings from NACD Blue Ribbon Commissions (2012 BRC) 

Social Factors

• Little knowledge of where to find candidates. 

– Solution: Expand horizons when seeking candidates.

• Overboarding of certain “star” board members. 

– Solution: Move beyond the “star” diverse board members. 

• Reluctance of sitting directors to leave a board. 

– Solution: Adhere to term-limiting mechanisms to build turnover 

acceptance.

• Consolidating diversity into one category and related 

stereotyping. 

– Solution: Do not “check the box.”
Barriers to Boardroom Diversity

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Findings from NACD Blue Ribbon Commissions (2012 BRC) 

Habitual Factors

• Failure to put diversity on the board’s agenda as a discussion 

topic. 

– Solution: Place diversity on the board’s agenda as a topic for 

discussion and education. 

• Tendency to seek only CEOs and experienced public company 

directors for board seats. 

– Solution: Move beyond CEOs in seeking to fill board seats.

• Existing lack of diversity on the nominating/governance 

committee. 

– Solution: Diversify nominating and governance committee 

composition.
Goals and Leading Practices: Define Diversity

• A comprehensive definition must include 

both identity—gender, race, ethnicity—and 

skills, such as professional experience. 

Given the nature of today’s business world, 

neither aspect can be excluded (2012 BRC). 

• Consideration of a candidate’s identity 

diversity has to coincide with a 

determination that the individual possesses 

skills and experiences desirable by the 

board (2012 BRC). 

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Findings from NACD Blue Ribbon Commissions (BRCs) 
NACD’s Recommendations for Boards

1. DISCUSS

• Candid, in-depth board discussions about critical topics like diversity are at 

the core of board contribution to any enterprise. 

2. SELECT AND IMPLEMENT SOLUTIONS

• At minimum, review and evaluate board composition, expand horizons for 

recruiting candidates, and improve director evaluations. 

3. DISCLOSE

• Consider going beyond required disclosures and provide shareholders with a 

thorough explanation of their director search process and the potential value 

it brings to the company.

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From the Report of the NACD Blue Ribbon Commission on Diversity: Moving 

From Interest to Action
Government Initiatives for Board Gender Parity 

• May 2014: Rep. Carolyn Maloney (D-NY) requested a GAO report 

on the boardroom gender gap. The report was released in 

December 2015 and indicated it could take 40 years to reach 

gender parity in the boardroom.

• March 31, 2015: Nine public pension funds (including OPERS, 

CalPERS, NYS-CRF) petitioned the SEC to require disclosure of 

each director nominee’s gender, race, and ethnicity in a matrix or 

chart.

• March 2, 2016: Sen. Sherrod Brown (D-OH), Maxine Waters (D-CA), 

and other Democrats sent a letter to SEC Chair Mary Jo White 

urging a speedier review of the diversity disclosure proposal by 

the public pension funds. 

• State Initiatives: Illinois, Massachusetts, and California have 

passed resolutions urging for more women on boards.

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Investor Initiatives for Board Gender Parity

• The Thirty Percent Coalition is an organization of executives, 

institutional investors, corporate governance experts, and board 

members that has the goal of 30 percent female representation on 

public company boards. 

– Work with companies on their recruitment strategies for women

– Push for increased SEC diversity disclosure

– Advocate for diversity through their members both publicly and privately 

• Impact-investment funds are being created to generate social 

change as well as financial returns. State Street Global Advisors 

created an index (SHE) to invest in companies with high levels of 

diversity. 

– Received a $250 million investment from CalSTRS

– Aims to accumulate $1.5 to $2 billion in one year

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CONCLUSION

• It will take a concerted effort from all vested parties to influence 

change. Most importantly, it will take strong leadership and the 

creation of a new organizational culture that will level the playing 

field for access and inclusion.

• “The law can push open doors and tear down walls, but it will not 

build bridges. That job belongs to you and me.”

» Supreme Court Justice Thurgood Marshall

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THANK YOU

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