On December 7, 2005, a blue ribbon commission of the National Association of Corporate Directors issued a report1 containing several recommendations for addressing the “new liability landscape.” Among these recommendations are that directors should:
Ensure that they are free from conflict and that their independence is uncompromised. They should assume and carry out their duties meaningfully and responsibly. They should assure that their fellow directors are well-qualified persons of integrity; that the board has the skill sets it needs to oversee management’s performance effectively; and that senior management is comprised of persons of integrity who set the right ethical tone overall and specifically for improving corporate governance.
Be diligent and attentive to all board matters, avoid self-dealing and be strict in observing and adhering to procedures for addressing conflicts of interest.
Understand the business, financial and competitive environments, the systems of controls and compliance, the culture, financial statements and the business strategies and risks faced by the companies that they serve, in addition to understanding their own general and specific legal obligations and fiduciary duties as directors.
See full Report (in pdf format).
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