Presentation to the NACD Southern California chapter on “Corporate Strategy and Reporting in a Global Economy: the Board’s Converging Roles.”

1. Clyde Wilcox, Georgetown University
“Disclosure by itself is not the solution
to any problem. It’s a path to earn
trust. But just saying things is not
enough, unless you also do something.”
How is your board using information
available to them to make the best
decisions?

5. NONFINANCIAL METRICS CATEGORIES
• Business Development
• Community Engagement/Corporate Social
Responsibility
• Competition/Market Share
• Corporate Culture
1. Understand and • Customer Satisfaction
agree on the • Environment, Health, and Safety
company’s key • Ethics
performance • Executive Talent Management/Succession
metrics. • Human Capital
• Innovation/Innovative Culture
These key metrics,
• Legal/Regulatory Compliance
set for both the
• Logistic Capabilities
enterprise as a whole
• M&A Execution and Integration
and for major
• Operations
business units, should
• Product Quality
be used to track
• Reputation
progress against the
• Risk Management
company’s strategy.
• Tone at the Top

7. “Corporate Strategy and
Reporting in a Global Economy:
The Board’s Converging Roles"

8. NACD’s 2011 Public Governance Survey
The top 5 priorities for the board include:
Strategic planning and oversight
72.1%
Corporate Performance &
40.6%
Valuation
Risk and Crisis Oversight 27.1%
Executive Talent Management &
25.8%
Leadership Development
CEO Succession 25%

9. 2012 World Economic Forum : • Increased understanding of the risks
and opportunities in current and emerging strategy

10. The World Has Changed
http://theiirc.org/wp-content/uploads/2011/09/IR-Discussion-Paper-2011_spreads.pdf

11. Sustainability - ne Definition
“meeting the needs of the
present without compromising
the ability of future generations
to meet their own needs”
1987 Brundtland Report

13. Tipping Points: NACD and Governance
1990: Institutional investor ownership of
shares hits 53.3 percent mark.
“At NACD, we champion the
inclusion of nonfinancial
metrics in performance
measurement” Alex Lajoux

14. Thank you
Fay Feeney
CEO
Risk for Good
fay@riskforgood.com
+1 310 372 0591
Twitter: @fayfeeney
Web: www.riskforgood.com

15. Corporate Strategy and Reporting in the
Global Economy: The Board’s Converging
Role
NACD Southern California
January 2012
Venue, Date

16. What are we seeing?

17. Shareholder Initiatives & Coalitions
• Principles for Responsible Investment (PRI) [2006]
– Currently represents over $30 Trillion in investment capital
– 900+ signatories
• Investor Network on Climate Risk (INCR) [2003]
– Currently represents over $10 Trillion in investment capital
– 100+ members
• Carbon Disclosure Project (CDP) [2002]
– Currently represents over $71 Trillion in investment capital
– act on behalf of 550+ institutional investors
• Institutional Investors Group on Climate Change (IIGCC) [2001]
– Currently represents $6 Trillion in investment capital
– 70 members
• Interfaith Center on Corporate Responsibility (ICCR) [1972]
– Currently represents over $100 Billion
– 300 members

18. Signatories to the PRI (US)
900+ international signatories
PARTIAL LIST OF ASSET OWNERS (200):
• AFL-CIO Reserve Fund / AFL-CIO Staff Retirement Plan
• CalPERS / CalSTRS
• Connecticut Retirement Plans and Trust Funds (CRPTF)
• General Board of Pension and Health Benefits United Methodist Church
• Illinois State Board of Investments
• Los Angeles County Employees Retirement Association (LACERA)
• Maryland State Retirement and Pension System
• New York City Employees Retirement System / New York State Local Retirement S
• SEIU Pension Plans Master Trust
• State Universities Retirement System of Illinois
• Teachers' Retirement System of the City of New York
• Universal Health Care Foundation of Connecticut

19. Signatories to the PRI (US)
900+ international signatories
PARTIAL LIST OF INVESTMENT MANAGERS:
• BlackRock • Boston Trust
• Calvert Investments • Capital Group International
• CBRE Investors • Clear Bridge Advisors
• Domini Social Investments • MFS Investment Management
• JPMorgan Asset Management • Principal Global Investors
• Kohlberg Kravis Roberts & Co, LLP • T. Rowe Price
• Krull & Company • Tower Capital Asset
• Northern Trust Global Investments Management LP
• Prudential Real Estate Investors
• Russell Investments
• TD Asset Management Inc.
• The Townsend Group
• TIAA - CREF

20. Mainstream Involvement

21. How does GRI help?

22. GRI’s Vision & Mission
Vision
A sustainable global economy where organizations
manage their economic, environmental, social and
governance performance and impacts responsibly
and report transparently.
Mission
To make sustainability reporting standard practice by
providing guidance and support to organizations.

23. The GRI Guidelines
Environmental
• EN 3 - Direct energy consumption by primary
energy source
Labor
• LA 7 - Rates of injury, occupational diseases, lost
days and absenteeism, and number of work related
fatalities by region.
Human Rights
• HR 4 - Total number of incidents of discrimination
and actions taken
Product Responsibility
• PR 6 - Programs for adherence to laws, standards,
and voluntary codes related to marketing
communications, including advertising, promotion,
ad sponsorship.
Economic
• EC 4 – Significant financial assistance received
from government.

24. Who are these Reporters?

25. Thank you
Mike Wallace
Director, Focal Point USA
Global Reporting Initiative
wallace@globalreporting.org
+1 212 339 0356
Twitter: M_A_Wallace
Linked In:
http://www.linkedin.com/in/mikewallace
Venue, Date

26. Peer to Peer
What are the top three challenges
the boardroom is facing relative to
sustainability strategy and
reporting?

27. Peer to Peer
Select the top challenge and using
GRI’s criteria what can the board
do to use this non-financial
reporting to differentiate their
business strategy?

28. Peer to Peer
What are your recommendations
to the boardroom to oversee this
fast moving non-financial
reporting for strategic advantage?