Resource Library Insights

How can committees continue to improve their impact on talent planning without “stepping on the toes” of management—recognizing that the administrative responsibility for talent matters is a management activity?

The ground is shifting for executive compensation, from a focus on shareholder metrics to a more intentional longer-term approach that better supports key stakeholders: workers, suppliers, communities, and customers. To make the shift, companies need to prioritize their key stakeholder issues, then identify which ones actually belong in a compensation package.

By investing in these areas even without an immediate commercial payoff, companies can bolster their long-term positions with both the stock market and society. 

Many business thinkers have criticized corporate “short-termism” that discourages crucial long-term investments in intangible capabilities. Executive pay programs get much of the blame, as even “long-term incentives” last only three years, with the goals for each year’s tranche reset annually.

The turbulent events of 2020 have heightened many American corporations’ sense of political and social responsibility. With the pandemic exacerbating income inequality and climate change still a long-term threat, investors and critics are calling on companies to care for all stakeholders, not just investors. Many boards are attending to their long-standing interests in environmental, social and governance issues more than ever before.

There’s a new perspective for the debate over corporate short-termism. In the past, we focused on shareholder value, specifically whether firms were cutting R&D and physical plant in order to make quarterly numbers or buy back stock.

Boards have a lot on their plate right now. They want leaders ready to handle the expanding complexities of corporate life with distributed decision-making, to respond to a rapidly changing business environment.

With widespread protests over persistent racism, many boards of directors are looking for their companies to do more to support racial equity. Here are considerations for different approaches that boards and management teams might pursue.

A new wave of innovation, centered on artificial intelligence, big data analytics, and the internet of things, is now intensifying the pace and magnitude of disruption.

While some have described the Covid-19 pandemic as a black swan event, in reality it should be treated as a “black elephant” — a cross between a black swan event and the elephant in the room.

Only by supporting all major stakeholders, through calibrated and balanced incentives, will companies achieve sustained success.

Strategic stability has fallen from its pedestal in favor of strategic agility.