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?

1. Understand and agree on the company’s key performance metrics.

These key metrics, set for both the enterprise as a whole and for major business units, should be used to track progress against the company’s strategy.

NONFINANCIAL METRICS CATEGORIES• Business Development• Community Engagement/Corporate SocialResponsibility

• Competition/Market Share• Corporate Culture• Customer Satisfaction• Environment, Health, and Safety• Ethics• Executive Talent Management/Succession• Human Capital• Innovation/Innovative Culture• Legal/Regulatory Compliance• Logistic Capabilities• M&A Execution and Integration• Operations• Product Quality• Reputation• Risk Management• Tone at the Top

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

Strategic planning and oversight 72.1%Corporate Performance & Valuation 40.6%

Risk and Crisis Oversight 27.1%

Executive Talent Management & Leadership Development 25.8%

CEO Succession 25%

NACD’s 2011 Public Governance SurveyThe top 5 priorities for the board include:

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

The World Has Changed

http://theiirc.org/wp-content/uploads/2011/09/IR-Discussion-Paper-2011_spreads.pdf

Sustainability - ne Definition

“meeting the needs of the present without compromising

the ability of future generations to meet their own needs”

1987 Brundtland Report

1990: Institutional investor ownership of shares hits 53.3 percent mark.

Tipping Points: NACD and Governance

“At NACD, we champion the inclusion of nonfinancial metrics in performance measurement” Alex Lajoux

Fay FeeneyCEORisk for Good

fay@riskforgood.com+1 310 372 0591Twitter: @fayfeeneyWeb: www.riskforgood.com

Thank you

Venue, Date

Corporate Strategy and Reporting in the Global Economy: The Board’s Converging Role

NACD Southern California

January 2012

What are we seeing?

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

Signatories to the PRI (US) 900+ international signatoriesPARTIAL 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 System• 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

Signatories to the PRI (US) 900+ international signatoriesPARTIAL LIST OF INVESTMENT MANAGERS:

• BlackRock • Calvert Investments • CBRE Investors • Domini Social Investments • JPMorgan Asset Management • Kohlberg Kravis Roberts & Co, LLP • Krull & Company • Northern Trust Global Investments • Prudential Real Estate Investors • Russell Investments • TD Asset Management Inc.• The Townsend Group • TIAA - CREF

• Boston Trust• Capital Group International • Clear Bridge Advisors• MFS Investment Management • Principal Global Investors • T. Rowe Price• Tower Capital Asset

Management LP

Mainstream Involvement

How does GRI help?

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. MissionTo make sustainability reporting standard practice by providing guidance and support to organizations.

The GRI GuidelinesEnvironmental• 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.

Who are these Reporters?

Venue, Date

Mike WallaceDirector, Focal Point USAGlobal Reporting Initiative

wallace@globalreporting.org+1 212 339 0356Twitter: M_A_WallaceLinked In: http://www.linkedin.com/in/mikewallace

Thank you

Peer to Peer

What are the top three challenges the boardroom is facing relative to

sustainability strategy and reporting?

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?

Peer to Peer

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