In the better late than never department, the National Association for Corporate Directors today kicked off a campaign to improve corporate governance. It urges boards to assess practices in four areas: executive compensation, risk oversight, corporate strategy and transparency.
That call is met with a resounding “duh!” If those areas aren’t already on the radar of companies throughout the U.S., the state of Corporate America is pretty sad indeed.The Washington, D.C.-based organization plans to disclose each quarter the names of boards that have accepted its challenge to “restore public and investor confidence in publicly traded companies.”
NACD will bestow a “Seal of Excellence” to those lucky ducks who meet its commitment to sound governance. This blogger hopes NACD will criticize companies with complaint or disinterested boards composed of “yes men and women.” A NACD “Seal of Condemnation” would be a nice touch and would receive much press.
Many will dismiss NACD’s challenge as a PR move or face-saving measure in the wake of corporate disasters at American International Group, General Motors, Citicorp (Citi’s CEO was ridiculed “Pandit the Bandit” by Maureen Dowd in the New York Times of March 22), Bank of America, Lehman Brothers, Bear Stearns, Washington Mutual and Wachovia.
They rightly remember 2002 Congressional testimony of then NACD chairman Roger Raber before the House Energy and Commerce Committee in the wake of collapses of Enron and Worldcom. He presented ten standards prepared by the NACD’s blue ribbon commission on director professionalism that were supposed to bolster corporate governance to make sure that basket cases like those mentioned above never happen again.
In the words of Yogi Berra, let’s hope the new NACD measures aren’t just a case of déjà vu all over again.