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Top Five Compensation Committee Priorities for 2021As 2020 mercifully comes to an end, we are looking forward with some optimism to a better 2021. We expect that there will be continuing uncertainty as questions loom about how quickly vaccines will be distributed and how open the population will be to vaccination; however, there is a real possibilit...
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The Business Roundtable’s Statement on Corporate Purpose One Year LaterIssue: 2020 Fourth QuarterIt’s been a little over a year since the Business Roundtable (BRT) issued its much-ballyhooed statement on corporate purpose. Many of the commentators who welcomed it rapturously predicted the statement would usher in a new era of corporate social responsibility (CSR), with corporations tackling a r...
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Two Views: Stakeholders Expect More From Corporate AmericaIssue: 2020 Fourth QuarterThere are many reasons for the ascendency of stakeholder-thinking in business. Some have even argued that “stakeholder capitalism” is the new narrative that better describes how businesses can be successful. While there has also been a great deal of skepticism around this proposed change in narrativ...
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Two views: Shareholders vs. Stakeholders: The Role of Corporate DirectorsIssue: 2020 Fourth QuarterIn the midst of economic calamity and the pandemic, capitalism is under fire. Present important debates over inequality of opportunity and outcomes, reinvigorating communities and addressing challenges from globalization to climate change to broader social justice come together in questions about ou...
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New Perspectives on Diversity in the Boardroom: To Curate, Obligate or Legislate?Issue: 2020 Fourth QuarterDiversity in the boardroom and the C-suite remains a top priority, but we must take the dialogue deeper and become more creative in our approach. While giving current efforts a chance to yield significant results, it is time to apply less prescriptive approaches to achieve remarkable diversity in ou...
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Actions and Initiatives to Increase Board DiversityIssue: 2020 Fourth QuarterDespite the fanfare around diversity, equity and inclusion (DEI), the corporate boardroom remains one of the least diverse environments in America. From 2010 to 2018, the representation of people of color on corporate boards increased from 12.8% to just 16.1%, an annual growth rate of less than half...
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Biggest Proxy Firms Issue 2021 Policy UpdatesThe two biggest and most influential proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis, recently released policy updates for 2021. In addition, ISS published “U.S. Compensation Policies and the COVID-19 Pandemic — Frequently Asked Questions” (FAQs) to help companies impa...
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Letter from the Chairman: Fellow DirectorsIssue: 2020 Fourth QuarterThanksgiving is America’s secular holiday that offers us the opportunity to reflect on what matters most in our lives. For 30 years Caro and I have hosted about three dozen family and friends, but because of COVID-19, this year’s celebration was unlike any other. We had 17 of our immediate family se...
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Editor's Note: Friedman Was RightIssue: 2020 Fourth QuarterAs this is the 50th anniversary of Milton Friedman’s seminal article in The New York Times Sunday Magazine arguing for the notion of shareholder primacy in corporate affairs, and the first anniversary of its repudiation by the Business Roundtable (BRT), some observations are in order. Friedman was n...
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Where Values Meet Value Creation: Foundations for Character-Driven CompensationIssue: 2020 Fourth QuarterIn an evolving governance environment, expressions of strong corporate character — exemplary corporate governance, responsible stewardship of the environment and positive contributions to society — are no longer nice-to-haves. They are increasingly becoming explicit expectations.For compensation com...
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Keeping a Foot on the GasIssue: 2020 Fourth QuarterThis year has brought more challenges than both the Business Roundtable (BRT) and Milton Friedman could have imagined — combined. It’s hard to conceive how much has changed and what will likely develop.In our editorial meetings we are working through “what’s next” discussions. True, these discussion...
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DIRECTORS TO WATCH: New Guidance Invites Investor Action on Diversity and InclusionIssue: 2020 Fourth QuarterEarlier this year, the Business Roundtable (BRT) and Institutional Shareholder Services (ISS) issued new initiatives and public policy recommendations on workplace diversity and inclusion, from the ground floor all the way to the boardroom, spelling out potential penalties for publicly traded compan...
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Remote Meetings Could Improve Diversity and InclusionIssue: 2020 Fourth QuarterThe COVID-19 pandemic has precipitated massive changes in how companies do business, how their employees perform their jobs, and how board governance is carried out amid tremendous uncertainty and even chaos. As many boards experienced, when COVID-19 struck, meetings increased in number from four to...
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Nasdaq Moves to Require Board DiversityNasdaq has made history by asking the SEC to approve a proposal to require companies to demonstrate board diversity in order to be listed on the exchange.The proposal, announced Tuesday, would require most boards to add a woman and a director who self-identifies as LGBTQ+ or as a member of another u...
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Taking a Fresh Look at Third-Party RiskIssue: 2020 Fourth QuarterCOVID-19, and measures to limit its spread, have led to unexpected border closures, regional lockdowns, facility shutdowns and quarantine mandates for workers causing a shortage of raw materials, reduced production levels and unprecedented supply-chain disruption and delays.Spikes in demand for some...
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Chief Diversity Officer Success Depends on Board, Executive CommitmentIssue: 2020 Fourth QuarterSince the wave of protests in response to the killing of George Floyd erupted across the country and the world, the demand for Chief Diversity Officers (CDO) has dramatically increased beyond the 50% of Fortune 500 companies that already had one in place (63% of those adding the position in the last...
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Editor's Note: Keep Politics Out of the BoardroomIssue: 2020 Third QuarterWe were traditionally taught that there were two things never discussed in polite company — religion and politics. These were guaranteed to ruin any family Thanksgiving dinner. Why? Because they were naturally divisive — subjects about which every member of any gathering would have widely differing ...
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Letter from the Chairman: Service to Our NationIssue: 2020 Third QuarterA new model of capitalism based on the overarching themes of purpose, inclusion, and sustainability is upending the decades old doctrine of shareholder primacy. For over a half century, corporate America has placed priority on providing profitability for its shareholders, which has proven to be high...
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Sticking to Business in the BoardroomIssue: 2020 Third QuarterJon Hanson says his first board appointment was likely connected to his politics. Not necessarily because he was a Republican or a Democrat, but because of his relationships.Hanson, the founder and chairman of Hampshire Real Estate Companies, was appointed to the New Jersey Bell (now Verizon) board ...
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Anyone's Game: This year’s U.S. presidential election will likely be a photo finish. How should boards prepare?Issue: 2020 Third QuarterFormer Vice President Joseph R. Biden perhaps made the understatement of the 2020 presidential election in a school gym a few miles from his home in Greenville, Del.“Well, this is the most unusual campaign, I think, in modern history,” Biden said during a June speech on the coronavirus pandemic.It’s...