Shearman & Sterling's recently released 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, 2020, as well as a focused review of and practical guidance on a number of hot topics - including shareholder activism trends, ESG incentive compensation metrics, and HCM oversight and disclosure.
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:
- 99 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, employee support, diversity, supply chain, and aligning corporate responsibility to long-term strategy.
- Of those 80% of CSR reports that identified standards, most referenced the GRI standards, followed by the UN SDGs. The TCFD framework was referenced the least.
- A majority of companies identified ESG factors as a skill set in their director skills matrix or narrative in their proxy statement - most commonly, diversity.
- Of the majority of 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 committee charters or their corporate governance guidelines.
Access numerous additional benchmarking resources on our Board/Governance Practices page. This post first appeared in the weekly Society Alert!