NACD SHINES LIGHT ON BOARD CULTURE IN NEW BLUE RIBBON COMMISSION REPORT

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National Association of Corporate Directors

Sep 29, 2023, 11:30 ET

The 24-Member Commission Is Led by Former United Airlines Chair and CEO Oscar Munoz and Longtime Public Company Director Mary Winston

WASHINGTON, Sept. 29, 2023 /PRNewswire/ -- The National Association of Corporate Directors (NACD), the authority on boardroom practices representing more than 23,000 directors, today released the 2023 Report of the NACD Blue Ribbon Commission: Culture as the Foundation: Building a High-Performing Board.

NACD and its 24-member Blue Ribbon Commission has thoroughly examined the role of board culture over the past six months and have published recommendations, guidance, and proven approaches that boards can adapt based on their needs.

The 2023 NACD Blue Ribbon Commission was led by distinguished cochairs Oscar Munoz (former chair and CEO of United Airlines and director of Archer Aviation, CBRE, Salesforce, and TelevisaUnivision) and Mary Winston (director of Acuity Brands, Chipotle, NACD, Northrop Grumman, and TD Bank Group) and an experienced collective of directors who serve on more than 70 boards in the public, private, and nonprofit sectors.

"No matter where the board is in its journey, this report will help a board strengthen its culture. Some boards will benefit from a comprehensive, step-by-step approach, while others may benefit from specific recommendations, such as equipping board leadership to change the culture," said Winston, Blue Ribbon Commission cochair.

In the report, the Commission notes that an intentional and healthy board culture is a unifying force that builds trust and encourages candor among directors and between the board and management. A strong board culture can also advance the board's agility at a time of relentless change in business.

"Boards have long expected management to take ownership of the values, beliefs, behaviors, and norms that make up the culture within an organization," said Munoz, NACD Blue Ribbon Commission cochair. "Now, it's time for directors to turn inward and embrace that same sense of ownership—but of their own boardroom culture. This year's NACD Blue Ribbon Commission Report addresses the importance and consequences of board culture. Notably, it lays out clear, actionable concepts that will immediately help directors, CEOs, and chairpersons positively shape boardroom culture—thereby enabling greater excellence in governance."

The Commission issued 10 recommendations to strengthen culture as a foundation for board performance. They are grouped in three key areas: defining optimal board culture, reinforcing board culture and behavioral norms, and addressing cultural fault lines.

Define Optimal Board Culture

1. Assess current board culture and intentionally define the desired state.
2. Agree on behavioral norms that support a clear delineation of board and management authority.
3. Periodically diagnose and, when needed, refine board culture to ensure it is fit for purpose in a dynamic business environment.

Reinforce Board Culture and Behavioral Norms

4. Clarify the roles and responsibilities of designated board leaders in reinforcing (and changing) board culture.
5. Assign primary ownership of board culture-related processes to the nominating and governance committee.
6. Build inclusive recruitment and onboarding practices to effectively integrate new directors into the boardroom and its culture.
7. Ensure that board evaluations assess the performance and behaviors of individual directors and their roles.

Address Major Cultural Fault Lines

8. Commit to addressing unhealthy behaviors and dynamics (group and individual), including problematic directors.
9. Destigmatize the decision of individual directors to leave a leadership position or to off-board.
10. Strive for consensus in key board decisions but recognize the value of rigorous debate.

Added NACD president and CEO Peter Gleason: "This report builds upon the 2017 NACD Blue Ribbon Commission initiative that studied organizational culture, underscoring how central culture is to long-term performance and business success. Looking in the rearview mirror of boards associated with company failures over the years, it becomes clear that boardroom culture deserves keener attention than it has been getting. This report offers steps in the right direction."

Members can read the full 2023 Report of the NACD Blue Ribbon Commission: Culture as the Foundation: Building a High-Performing Board.

About the Blue Ribbon Commissioners
The NACD 2023 Blue Ribbon Commission constitutes a roster of distinguished corporate leaders and subject-matter experts. Cochairs are Oscar Munoz, former CEO and chair of United Airlines, and Mary Winston, president and founder of WinsCo Enterprises. Commissioners: Claudia Allen (KPMG), Gaurdie Banister (Different Points of View), Olu Beck (The Beck Group NJ), Paula Cholmondeley (The Sorrel Group), James Cole Jr. (The Jasco Group LLC), Stephanie Creary (University of Pennsylvania), Ralph de la Vega (De La Vega Group), Samuel di Piazza Jr. (PwC, Ret.), Nicholas Donofrio (NMD Consulting LLC), Rob Galford (Center for Leading Organizations), Lori George Billingsley (Fortune 500 Director), Peter Gleason (NACD), Holly J. Gregory (Sidley Austin LLP), Heather Hiles (Imminent Equity), Jarvis Hollingsworth (Irradiant Partners LP), David Jackson (Mercer), Cynthia Jamison (Former Chief Financial Officer), Jannice Koors (Pearl Meyer), Sonita Lontoh (HP), Kirthiga Reddy (Virtualness), Jane Sadowsky (Moelis), and Laurie Yoler (Playground Global). The titles and affiliations of commissioners in this list are selective. Commissioners participate as a service to the governance community and not as representatives of any organization.

About NACD
The National Association of Corporate Directors (NACD) is the premier membership organization for board directors who want to expand their knowledge, grow their network, and maximize their potential. As the unmatched authority in corporate governance, NACD sets the standards of excellence through its research and community-driven director education, programming, and publications. Directors trust NACD to arm them with the relevant insights to make high-quality decisions on the most pressing and strategic issues facing their businesses today.

NACD also prepares leaders to meet tomorrow's biggest challenges. The NACD Directorship Certification^® is the leading director credential in the United States. It sets a new standard for director education, positions directors to meet boardroom challenges, and includes an ongoing education requirement that prepares directors for what is next.

With an ever-expanding community of more than 23,000 members and a nationwide chapter network, our impact is both local and global. NACD members are driven by a common purpose: to be trusted catalysts of economic opportunity and positive change—in business and in the communities we serve. To learn more about NACD, visit nacdonline.org.

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SOURCE National Association of Corporate Directors