Practical Thoughts for the Evolving Role of the Compensation Committee

Published: November 2021


Much has been written in recent months about the external forces accelerating investor, proxy advisor and employee focus on the topic of human capital management. With rising disclosure requirements and broader recognition by investors and insurers of environmental, social and governance (ESG) factors for every company, the compensation committee is more central to a firm’s ESG strategy and journey than ever before. In fact, a majority of respondents in Aon’s Fall 2021 ESG Oversight Survey indicated that “human capital management” and diversity, equity and inclusion (DE&I) are now formal duties of the compensation committee. Additionally, many companies have updated their charter documents to include oversight of human capital management and, increasingly, DE&I related duties.

This expanded role into broader people risk and opportunities poses new challenges for the compensation committee. What variables must now be considered? How can compensation committees ensure they are effectively growing and fulfilling their widening roles?

Gayle J. Appelbaum, partner at McLagan’s corporate and consumer banking consulting practice at Aon, along with Laura Wanlass, partner and head of global governance at Aon, provide recommendations and best practices for compensation committees to consider as we head into the 2022 proxy season in a new article for Bank Director. Click here to read the full piece.

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