Shearman & Sterling's recently released and always highly-anticipated report on its annual "Corporate Governance & Executive Compensation Survey" contains an abundance of benchmarking data for the 100 largest US public companies (listed at the end of the report) based on publicly available resources as of June 1, 2019, as well as a focused review of and practical guidance on a number of hot topics - including ESG, corporate culture, cybersecurity, board diversity, gender pay equity, HCM, and associated disclosure and governance practices and recommendations.
The report's deep dive on ESG practices is particularly noteworthy in view of the broad stakeholder focus on various sustainability issues.
Key benchmarking results include:
- 96 companies issued a CSR report (typically titled as either "Corporate Social Responsibility Report" or "Sustainability/Environmental Report"), usually in the form of a single report.
- Topics covered in the CSR report most commonly included Sustainability, Aligning Corporate Responsibility to Long-Term Strategy, Employee Support, and Diversity, and least commonly covered Privacy/Data Security, Human Rights, Veterans/Military Families, and Citizenship.
- Of those 76% of CSR reports that identified standards, most referenced the GRI standards, followed by the UN Sustainable Development Goals. The TCFD framework was referenced the least.
- A slim majority of companies identified ESG factors as a skill set in their director skills matrix or narrative in their proxy statement - most commonly diversity and/or environment/sustainability.
- Most companies (85%) don't consider ESG factors in their long- or short-term compensation metrics.
- Of those companies that disclose their oversight structure, boards typically oversee ESG at both the board and committee levels. For those boards whose oversight structure includes a board committee, allocation of responsibility to the Nom/Gov Committee is the most common approach.
- Most companies disclose ESG oversight in their committee charters or corporate governance guidelines.
Access numerous additional benchmarking resources on our Board/Governance Practices page. This post first appeared in the weekly Society Alert!