NACD Directorship 100 Reveals New Boardroom Strategies for Directors in 2011

NEW YORK, Nov. 12, 2010 /PRNewswire/ -- The National Association of Corporate Directors (NACD) has concluded the 11th annual NACD Directorship 100 Forum, an elite assembly of the nation's most influential directors and governance thought leaders. Speakers included fraud investigator and Madoff whistleblower Harry Markopolos who advocated that internal compliance at corporations report directly to the board rather than management to assure independence. In his remarks, Anton Valukas, the court-appointed examiner in the Lehman Bros. bankruptcy, said boards are ill equipped to understand crisis but are not liable. Activist investor, William Ackman, founder of Pershing Square Capital, said he was joining the board of Howard Hughes Corp. in the role of chairman and will have a first-hand experience in seeing things from a board director's perspective.

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Throughout the two-day conference, which opened with a tribute to the 2010 Directorship 100 and Corporate Governance Hall of Fame, boardroom leaders and attendees tackled the issues of developing a culture of integrity, identifying the proper mix of individuals with skill sets to meet the increased demands of board service, and asking tough questions of management to ensure proper oversight and risk assessment.

"The hard-hitting insights delivered by corporate leaders here today suggest a new resolve in how we view our role on corporate boards," said NACD President and CEO Ken Daly. "It's clear that directors today recognize an increased responsibility to engage strategically and address risk, but they also recognize a new and significant opportunity to bolster investor confidence and drive economic growth."

Valukas provided the keynote and a summary of the comprehensive, 2,200-page report assessing the missteps on Lehman's board. Valukas detailed what was learned from the mistakes made and what boards must do differently to avoid a repeat of the failure. "Had the board questioned rather than acquiesced, the result may have been a softer landing for the company and the U.S. economy...boards must demand transparency," said Valukas. "Boards are not management and can't make certain decisions. But future boards will definitely be expected to ask tough questions." Valukas emphasized the SEC's "zero-tolerance" policy for misstatements on a company's balance sheet to give the impression of stronger financial standing, stating that "the days of window-dressing are over."  

Markopolos addressed the current leadership of the SEC. "Mary Schapiro will go down as the best SEC chair in history," he said. "The SEC is back. If it's between their reputation and yours, they're going to win."

Markopolos also offered a candid assessment of the recently enacted Dodd-Frank Act, particularly the controversial provision that rewards whistleblowers who report securities fraud with 10 to 30 percent of the settlement. "If your compliance officers don't do their jobs, complaints will be reported out and whistleblowers will be very well rewarded for it," Markopolos said. "Don't put yourself in that position. Be vigilant."

Ackman and Patrick McGurn, special counsel to ISS Governance Services, engaged in a spirited panel discussion on the topic of the investor as "game changer."  Led by Robert A.G. Monks, corporate governance pioneer, shareholder activist, noted author and founder of Lens Governance Advisors, the panel delved into a range of hot-button issues including proxy, access, board composition, say on pay and political participation by corporations. During his comments, Ackman announced he will become chairman of The Howard Hughes Corp., a spin-off of mall owner General Growth Properties, Inc., which recently emerged from bankruptcy.

"The good news for everyone in the room is, beginning today, I am now chairman of the board of The Howard Hughes Corporation, which is being traded on the New York Stock Exchange," Ackman said. "So, it's a company you can buy stock in. You can throw out the board. The board is elected annually. You can call a shareholder meeting with 15 percent of the vote...so, you know, you can get me back."

The D100 list, published in the September 2010 issue of NACD Directorship, can be accessed at:

http://www.nacdonline.org/AboutUs/PressRelease.cfm?ItemNumber=2720

About NACD

The National Association of Corporate Directors (NACD) is the only membership organization delivering the information and insights that corporate board members need to confidently navigate complex business challenges and enhance shareowner value. With more than 10,000 members, NACD advances exemplary board leadership.  NACD is focused on creating more effective and efficient boards through director-led education and peer forums to share ideas and leading practices based on more than 30 years of primary research. Fostering collaboration among directors and governance stakeholders, NACD is shaping the future of board leadership.  To learn more about NACD, visit www.NACDonline.org.

SOURCE The National Association of Corporate Directors