What is the pay ratio rule?
? (need to insert the book answer)Total CEO pay /(total pay-total ceo pay)SG2 ref p. 82 | def SG2 ? (MK)
What is one way the role of the board and in committees in talent oversight is changing?
Effective oversight of human capital strategy and risk is rapidly becoming a greater board responsibility, going much beyond the traditional focus on the compensation of the C-suite. (MK)
What is inexorably linked to strategy and risk
Talent development SG Pg. 82
What is the board's role in regard to talent oversight?
1)ensure the strength of the organization's ongoing talent development program 2)monitor the development of identified potential successors for critical roles within the organization through 3-5 and longer year intervals.Additionally, the board should request that management consider the talent component of every strategic initiative, and the skills required from leadership and the workforce at large to carry out the initiative. SG Pg. 83
What is the role of management in regard to talent oversight?
Management must own the talent development process.SG Pg. 83
What should the board do on an annual basis?
The board should conduct a forward-looking deep dive on talent at least annually.SG Pg. 83
What role does the compensation committee play in talent management.
Because the compensation committee often leads CEO succession planning and oversees executive compensation, it can help ensure that the company's pay and incentive philosophy are consistent and effective throughout all levels of the organization in order to attract and retain talent. SG Pg. 83
Compensation and Human Capital Committee or Compensation and Talent Management Committee
Many companies have chosen to expand the jurisdiction of the compensation committee and have re-named it.SG Pg. 83
What role does the nominating and governance committee play in talent oversight.
The nominating and governance committee evaluates bench strength of the senior levels of the organization and evaluates senior management.SG. Pg. 84
What role does HR play in Talent oversight?
HR serves as the strategic architect for talent and as a liaison to support the board in its talent oversight role.SG Pg. 84
How many years out should board's look when discussing talent strategy.
As technological advancements will require employees with more technical skill sets, board must ensure management's talent strategy is looking at least 5 years out.SG Pg. 85
CEO Pay ratio rule
Requires public companies to disclose the ratio between the annual compensation of the median employee and principal executive officer. This metric will ensure the company's pay philosophy is consistently applied to all levels of the organization.SG Pg. 86
How can board members assess employee engagement?
The board should pay attention to culture and morale, especially at the middle and lower levels of the organization. candid exit interviews, 360-evaluation to benchmark managers' performance in supporting growth and promotion.An additional item mentioned is for Directors to make occasional site visits to engage with and assess the culture of, employees at the operational level. SG Pg. 86
What are lagging indicators?
Performance measurements resulting from decisions and activities in the past.SG Pg. 85 definition taken from google.
What are leading indicators?
Objective measures that correctly predict future labor demands.SG. Pg. 85 definition taken from google
Name some lagging metrics that are used for assessing talent development.
Turnover at all levelsLength of time in current role for current C-Suite executivesDifference in retention rates between high and low performersResults of employee engagement surveysTurnover of executive positions, noting if this turnover is due to internal promotion, and if successors are sourced externally or from within the organization. SG Pg. 85 blue line
Name some leading metrics that are used to assess talent development.
Number of candidates eligible to succeed current C-suite executives, over specific time framesDemographic profile of candidatesHow long "high-potential" employees stay in their positions before moving to different internal positionsNumber and percentage of employees defined as "high potential" in development programPercentage of employees with skill sets identified as necessary for long-term strategyNumber of candidates for key executive positions who are considered "ready now" and "ready in two to three years"SG. Pg. 85 blue line