How Board Agendas Tie to Human Capital
Often, words make a difference. Some are not fans of “corporate speak” but are coming around to the idea that nomenclature matters. Consider this food for thought:
“Review workforce compensation strategy (“Total Rewards”)” as an agenda topic recognizes that compensation is more than salary! It encourages boards to think more broadly about compensation.
“Review human capital management programs including succession planning (below C-suite)”as an agenda topic encourages boards to go below the C-Suite to see how the company is developing its talent as they work their way up the corporate ladder or grow in place. This type of report could include training programs that keep employees current with tech changes as an alternative to eliminating employees who do not have skills needed to use this new tech.
“Review executive talent development and succession planning” is a key board responsibility. We have seen some companies weather sudden CEO deaths or disabilities because the board had done the necessary but challenging work in this area. Companies that have not done this work are often thrown into chaos.
“Review human resources strategy”is about making sure that the board and management have an understanding of potential changes to the company’s workforce as a result of changes to the company’s business as well as emerging technologies and other workforce changes. It goes beyond considering potential changes in the next year to looking forward at least five years to try to project the company’s workforce needs and opportunities. Institutional investors are also beginning to focus not just on executive compensation programs and strategy, but on the company’s approach to recruiting and retaining talent company-wide. This includes whether the company’s workforce relies on full-time, part-time, temporary, or outsourced labor.
How Board Agendas Can Help a “Human Capital” Strategy
In many cases, old-fashioned agenda topics don’t effectively frame current human capital management topics. That’s understandable given that human capital management is broader & deeper than “old-fashioned” topics like executive compensation and succession planning for the C-Suite.
Using more current & dynamic agenda topics – like those suggested by the “SASB Materiality Map” – a board (or its responsible committee) can more effectively delve into topics that address “the management of a company’s human resources (employees and individual contractors) as key assets to delivering long-term value. It includes issues that affect the productivity of employees, management of labor relations, and management of the health and safety of employees and the ability to create a safety culture.”
We suggest agenda topics like:
Review human capital management programs including succession planning (below C-suite) – The board or committee responsible for recruiting, retaining, evaluating and succession planning for non-C-Suite positions and the human capital management programs should ensure they align with the company’s values, culture and strategic direction (including the company’s compensation philosophy).
Review human resources strategy – The board or committee should understand potential future changes to the workforce as a result of the rise of emerging technologies and other workforce changes. The board and management should not only be considering potential changes in the current year, but should instead look forward to at least 3-5 years to attempt to predict the company’s needs. Institutional investors are beginning to focus not just on executive compensation programs and strategy, but also on the company’s approach to recruiting and retaining talent company-wide.
Review diversity & inclusion – A diverse and inclusive workforce culture is helpful in recruiting and keeping top talent. Customers value it as well. The board or committee should review the status of the company’s workforce diversity (gender & ethnicity) and inclusion efforts and results. Management’s reporting on this topic should provide an overview on the company’s recruitment programs as well as data on retention rates.
How does your agenda compare? We’d love to hear from you. Email us at info@corpgovpartners.com.
Get your agenda priorities straight!:
