Global Governance Advisors

Four Steps a Board Should Follow When Determining Executive Compensation

Posted by Paul Gryglewicz on Jul 9, 2018 8:35:26 AM

This year’s FIFA World Cup highlights the importance of using defense to create a top-notch offense. The same can be said for Boards of Directors. The board’s best offense is a good defense, and good defense starts with a great fundamental base.  That base, in the world of compensation, is the Compensation Philosophy, and that philosophy needs to mirror the business strategy of the company. 

Two critical roles of the board of directors are establishing CEO succession plans and establishing executive compensation plans that both attract and retain executive talent and deliver the outcomes that align with the goals set by the board. While the board may act in good faith, there are times when there is shareholder push back.  How can the leading boards of directors develop executive compensation plans that are shareholder friendly?  Let’s take a deeper look at how executive compensation should be established in order to better align executive pay with shareholder returns.

The data from CEO compensation research continues to illustrate that the top paid CEOs have many layers of executive compensation.  When a board’s Compensation Committee finally agrees on how executive compensation is determined, it must ensure that it is market defensible and will pass the seemingly infinite views on “appropriate compensation”. 

There are four steps a board should follow when determining executive compensation:

  1. Establish the compensation philosophy and peer group;
  2. Review current executive compensation against market practice;
  3. Assess the business impact before making final approvals;
  4. Report the process and compensation results to the executives and shareholders via the annual Proxy.

 

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Topics: board of directors, GGA, Executive Compensation

How to Effectively Take Board Meeting Minutes

Posted by Linaeya Horn-Muller on Jul 5, 2018 5:34:37 PM

The number of times a board meets each year varies and is dependent on each individual board’s goals. Some boards will only meet once – at their annual general meeting (AGM) – and others will meet multiple times. Regardless of how many times a board meets, one task is universal throughout all board rooms. During each meeting, board meeting minutes are recorded.  

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Topics: GGA, Meeting Minutes, Board Room

Making Sense of Your Role – Better Defining Board and Management Responsibilities

Posted by Peter Landers on Jul 5, 2018 3:26:08 PM

To ensure good governance practices, Board members must acknowledge and adhere to three primary fiduciary duties, which was the message that I recently delivered in education sessions to public pension plan trustees and board members for not-for-profit organizations.

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Topics: define your board, board of directors, GGA

The Importance of Giving Back to One's Community - A Life Lesson

Posted by David Boim on Jul 5, 2018 3:23:54 PM

Global Governance Advisors (GGA) includes “giving back to our community” as a core value of our corporate culture. The GGA staff identifies meaningful programs and partnerships that empower individuals living with developmental disabilities and youth in under-served communities. Our corporate philanthropy focuses on three areas:

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Topics: GGA, Autism Awareness, Corporate Philanthropy

The Power of Board Assessments

Posted by Peter Landers on Jul 5, 2018 3:23:19 PM

Board assessments are a powerful tool that can be used to evaluate the ongoing performance of your Board and ensure that you are following proper governance practices.

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Topics: board of directors, GGA, board assessments

Three Types of Board Assessments That Will Benefit an Organization's Board Governance Practice

Posted by Peter Landers on Jul 5, 2018 3:20:53 PM

Board assessments can range in scope from simple, post Board meeting questionnaire of 5 to 10 questions on how to improve future meetings to detailed reviews at the end of the year that cover not only Board performance, but also director’s views on Committee performance and their peers’ performance. While organizations tended to conduct these types of assessments internally in the past, more and more organizations are relying on independent third parties to help them during the assessment with 45% of Boards reporting the use of consultants during their Board assessment, according to a recent Global Board survey, conducted by InterSearch and Board Network.

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Topics: board of directors, GGA, board assessments

Striving For Good Governance Should Be Universal

Posted by Brad Kelly on Jul 5, 2018 3:16:31 PM

There is a wide array of organizations that exist in the market place:

  • for-profit/not-for-profit
  • privately-owned/publicly traded
  • public sector/private sector

And unfortunately, with this variety, there tends to be a false assumption that there shouldn't be a similar array of board governance standards.

The truth is that ALL Boards of Directors operate under the same three fiduciary duties:

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Topics: board of directors, compensation governance, GGA

How to Adopt a Dynamic Approach Towards CEO Compensation and Governance

Posted by Paul Gryglewicz on Jul 5, 2018 3:08:05 PM

CEO compensation governance is fast paced, and it can be seemingly impossible to stay ahead of the ever-changing industry trends. The industry tends to move so quickly that a seasoned executive may not even be aware that they are at risk for creating a Board that is non-compliant when creating dynamic incentive plans for the CEO and other key senior managers.

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Topics: compensation governance, risk mitigation, GGA

The Five Human Capital Management Questions Every Board of Directors Must Address

Posted by David Boim on Jul 5, 2018 3:06:01 PM

“Given the pace of business change today, companies increasingly need agile boards with the expertise to guide the company amid emerging threats and opportunities. And investors increasingly expect that boards will embrace rigorous practices to ensure they have the right expertise in the boardroom to respond to evolving market and competitive demands. The highest-performing boards will adopt a continuous improvement mindset, ensuring that their composition evolves in light of new strategic imperatives.” AESC.org

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Topics: board of directors, hcm, GGA, human capital management