Advising the Board on Its Expanding Role in Human Capital Management

Leading Distributor Case Study

Compensation Governance

Advising the Board on Its Expanding Role in Human Capital Management

Business Situation

Our client, a high-performing Fortune 100 distributor wanted to increase focus on human capital management (HCM) at the board level. This practice is growing as boards are realizing the broader impact of HCM on long-term performance. Our client asked us to consult on the most effective way to incorporate HCM into board discussions and responsibilities.

Challenge

As the value of HCM continues to grow, boards are learning about their own role in this space. Boards must understand the key topics, how to prioritize them, when and where to discuss these topics, and appropriate decision rights between management and the board. Without properly building the right structure around roles and responsibilities, many key HCM topics can get pushed to the wayside.

Our Impact

We helped our client by benchmarking peer charters and interviewing all their committee members to develop a clear picture of the playing field. We then developed a grid to facilitate conversations with the board about oversight responsibilities of the whole board vs. each board committee, as well as decision rights. This grid was composed of an extensive list of HCM topics including diversity, equity, & inclusion, ESG in incentives, pay equity, succession and talent planning, and leadership development.

This exercise in understanding and clarifying responsibilities ultimately ensured that each topic receives adequate attention from the board. Now, each compensation committee meeting has an HCM theme with corresponding agenda items. Every year, the compensation and sustainability committees have a joint meeting to touch base on all overlapping issues and objectives.

Have a question? Contact us and we’ll get back to you within a day.