Human Capital Management: Defining the Compensation Committee’s Role
Recently, Mike Melbinger gave some reasons why compensation committees should expressly take on the responsibility of human capital management. A memo from Willis Towers Watson looks at what that role would typically entail. Here’s an excerpt:
Collaboration would typically include a review and approval of HCM strategies and regular updates on the strategies’ execution and effectiveness. We would anticipate a greater level of granularity on key talent (regardless of level) and leaders (one to two levels below CEO), while the broader employee base would be managed in aggregate or by major segment/group.
In addition to the responsibility matrix, the board will need to specifically define the broad topic of HCM covering the entire employee lifecycle from recruitment and onboarding to talent development and succession. We suggest that a broad approach is likely required to address the full value of human capital throughout the organization. The investments that are made in support of this “asset base” will include the full employee experience and both monetary/nonmonetary programs.
Management should retain the actual development of HCM policies and practices, and their implementation. The board should step in to oversee strategy and implementation, to ask the right questions and to fully vet unresolved issues.
-Liz Dunshee, CompensationStandards.com August 2, 2019
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