KPMG: Focus on Board Composition

As with other operational or strategic metrics, adding ESG metrics to incentive plans can be a signal of importance and a sign of commitment.

For companies that are early in their ESG and HCM journey and considering a link to incentives, a scorecard may be a good starting point to help address some of the issues that come along with setting ESG and HCM goals.

The most critical choice the board makes is selecting the CEO. All boards have strategies that the current management team has developed. A different standpoint on strategy, in turn, may require a different kind of leader. 

We recommend boards and directors ask these questions to help understand their role in process oversight, emergency planning, transition dynamics, and more.

Private companies and private equity- or venture capital-backed pre-initial public offering (IPO) companies fall at one end of the governance and compensation spectrum.

As companies finish the 2022 compensation season and prepare for 2023, we highlight top-of-mind topics for compensation committee members, questions to ask, and related resources.

Moving forward, we anticipate that ESG metrics will continue to become more prevalent among S&P 500 companies before hitting an eventual plateau.

Recognizing both the shrinking of leaders’ tenures and the shifting skill sets needed for future success, many boards are now making succession planning a continual process.