“The HCM Funnel: Board Considerations for Disclosures on Human Capital Management” from Semler Brossy (Directors & Boards) aims to help companies identify which human capital topics to prioritize for public disclosure and which particular metrics to integrate into executive incentive pay, if any.
Inventory and prioritization - Identify which human capital topics are currently being tracked and which are most relevant for the business, and then factor in stakeholder priorities, focusing on areas where the company is already distinguished or those with the greatest opportunities for improvement.
Disclosure - Disclose the most critical topics in the most appropriate medium (e.g., proxy statement, website) depending on the purpose and attributes and/or constraints of the filing or other medium and taking into account how various types of disclosure relate to one another (if at all).
The firm shared the following example of a way in which some of its clients track disclosure types and venues (topics are illustrative):
Compensation - Consider integrating metrics that are critical to driving the business into executive compensation to incentivize desired behaviors. The firm advises that any metrics should be material and measurable; allow for setting meaningful goals; and align with the broader company strategy and culture.
Access numerous additional resources on our Human Capital/Workforce Management page.
This post first appeared in the weekly Society Alert!