Embracing the Changing Corporate Governance Landscape

• Published in: Directorship Vol. 36; no. 5; p. 66
• Main Author: Kueppers, Robert J
• Format: Trade Publication Article
• Language: English
• Published: Boston National Association of Corporate Directors 01-10-2010
• Subjects: Boards of directors; Clawback; Committees; Compensation plans; Compliance; Corporate governance; Disclosure; Employees; Executive compensation; Nominations; Public companies; Responsibilities; Wall Street Reform & Consumer Protection Act 2010-US
• ISSN: 0193-4279

Questions that boards and compensation committees may consider in this area include: * Do the company's disclosures offer a clear, concise picture of compensation practices? * What are significant shareholders' views regarding the company's executive compensation programs? * Does the company have a robust description of the reasoning for its executive compensation plans? * Should the company proactively eliminate compensation practices that are "lightning rod" issues? * Does the company have appropriate countermeasures to minimize excessive risk-taking in its compensation programs? Questions to consider include: * What changes are necessary to the compensation committee's charter in order to reflect its increased responsibilities? * Should the nominating committee's criteria for assessing compensation committee candidates place some emphasis on human resources or compensation-planning experience? * Has the committee engaged a compensation consultant to help evaluate the link between compensation programs and risk? * Has the compensation committee worked with other board committees, particularly the audit committee, to understand the relationship between risks and compensation incentives?