Effective Remuneration and Nomination Committee(s)

Course Introduction

“How does executive remuneration link to our strategy and Key Performance Indicators?”

FRC Guidance on Board Effectiveness 2018

These two committees are well-established elements of corporate governance: supporting the firm’s achievement of its purpose and its culture. In truth, failings and exposure in both executive remuneration and quality have themselves driven extensions of corporate governance, with regulators stage managing in the wings, and a rapidly evolving diversity agenda.  Not surprisingly this has led to a progressive extension in their scope, remit….and regulatory expectations.

They make decisions that reflect and support the people and culture of the business. There is a wealth of evidence that the mix of competencies, independence and skills of the Board are critical to the effectiveness of the Board and the success of the company. Of equal importance is the informed judgement in determining levels of remuneration, the link with performance, alongside the structure of the executive package.

It is essential that those appointed to the Remuneration and/or Nomination Committees are aware of the standards they are required to meet and understand the regulators’ perspective.

Being a Remuneration or Nomination Committee member is not an ‘easy’ option. This course will update you on the core responsibilities, developments and direction of travel, explore some common challenges and facilitate thinking through how you evidence the effectiveness of your committees.

Course Objectives

By the end of the course, participants will be able to:

• Gain a clearer understanding of the roles of the Remuneration and Nomination Committees
• Learn what practices and pitfalls Rem/Nom Cos have experienced and how to avoid them
• Understand changes in UK requirements
• Review your current scope and structure against current standards
• Consider your culture and how remuneration reflects and supports this
• Know the principles that regulators expect to be applied in the UK
• Understand best practice for selecting and using external advisers
• Explore how to set and assess levels of effectiveness

Course Content

• The Board and its committees
  • Revising the Board’s relationship with its committees: matters reserved
  • How are Boards doing?
  • Guidance from the governance codes
• NomCo: building an effective Board
  • NomCo traditional responsibilities
  • The evolving role in Board effectiveness: cognitive diversity? Turnover and succession planning?
  • Induction and on-boarding
  • Questions for the Nominations Committee
• RemCo: aligning Strategy, Risk and Culture with Remuneration
  • RemCo structure and core responsibilities
  • Drivers of your Remuneration Policy
  • Attracting, retaining and motivating quality people
  • Questions for the Remuneration Committee
• Committees: Directions of travel
  • The return of economic volatility
  • Regulatory requirements……. SYSC 19D, PS20/16, SMCR, SS5/16…… and keeping it proportionate
  • Challenges and watchlist: shareholder/investor requirements? Stress testing terms of reference? Boardroom talent……..?
• Maintaining effectiveness
  • The Board evaluation
  • Common areas for enhancement
  • Action plans?