Center On Executive Compensation

Boards “Double Down” on Talent

Nearly 40% of corporate directors now rate talent and culture as a top-five risk, according to PwC’s annual survey. With SEC regulations looming and anti-ESG proponents hunting for corporate DEI programs to criticize, boards are focused on providing proper oversight of talent management - without overstepping.

What’s happening: In a new report, PwC dives into emerging practices among boards for supervising talent management strategies, while also making significant recommendations to directors for how to deepen their footprint in this area.

  • C-Suite Oversight. Directors may choose to set objectives for the CEO and other executives on items like talent management, fostering an inclusive culture, and setting a tone of high ethical standards. These do not need to be tied to pay but should be measured (on the other hand, a surprising majority of directors believe customer satisfaction, succession planning and employee engagement and attrition rates should be tied to pay).

  • Below the Top. Boards frequently feel less certain about talent and culture below the C-Suite level. PwC recommends steps to assess up-and-comers as well as reviewing metrics and skills gaps in the broader organization.

  • Use of Data. The report lists a surprisingly (and somewhat disconcertingly) long list of metrics the board could request, from turnover and unfavorable exit interviews among high-performers, to succession plan failures and whistleblower complaints.

  • Personal observations. Following on the data requests, the report encourages directors to monitor employee sentiment personally by interacting with employees during site visits, engaging with the front line as a customer, and requesting reports on company culture.

  • Give Talent a Home. As we at the Center have increasingly observed, boards are assigning talent management responsibility to a specific committee (usually the Compensation Committee), incorporating talent into strategy discussions, seeking talent skills in new directors and elevating the CHRO.

Why it Matters: Directors are pelted from all sides with demands, suggestions, and advice regarding oversight of talent and culture. Be aware of the questions your board is being encouraged to ask (PwC provides a helpful list in the appendix of this report) – and avoid being caught off guard at the next meeting.

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Authors: Ani Huang



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