According to Semler Brossy’s report: “The Compensation Committee’s Evolving Role in Human Capital Management,” based on its review of fiscal 2022 proxy statements, 40% of S&P 500 boards and 50% of Fortune 100 boards have changed the names of their Compensation Committees to encompass aspects of human capital management and even more have expanded the Committee’s responsibilities in their charters—most commonly to include leadership development, succession, talent planning, and/or DE&I.
The instructive report, which is effectively a “how to” roadmap for Compensation Committees seeking to expand their remit, includes—among other things—actionable guidance for Compensation Committee members and management who support the committee, along with sample “expanded” Compensation Committee charter language (Amazon: Leadership Development and Compensation Committee charter and Hershey: Compensation and Human Capital Committee charter); examples of key committee and the board-level involvement with regard to discrete ESG and HCM oversight responsibilities; and a sample quarterly calendar of Compensation Committee activities addressing core/traditional as well as human capital management agenda topics.
The report also provides guidance to committees and boards on performance goals and evaluation (performance management process), succession planning, DE&I, and corporate culture.
See our recent report: “Compensation Committee Evolves: Considerations & Tools” and additional resources on our Compensation Committees and Human Capital/Workforce Management pages.
This post first appeared in the weekly Society Alert!