Why this is important.
Boards are increasingly recognizing the value of a dedicated compensation committee because hiring and retaining a president are among the core fiduciary responsibilities of governing boards. Committee members must ensure that the compensation and benefits an institution pays its leaders are reasonable, compliant with the law, befitting of the institution’s philosophy and budget, and effective at securing the best talent possible.
Questions for boards.
These are key questions for your board to consider:
- Is our committee aware of the impact of issues brought before other board committees that deal with compensation-related issues?
- Are our committee meeting agendas concise and do they clearly state desired meeting outcomes?
- What is our institution’s average tenure for presidents?
- How competitive is our compensation package for presidents compared with our peer institutions?
- Does our committee translate our charges into annual goals and work plans that align with the board’s governance responsibilities and our institution’s strategic plan?
- Does our committee ensure that the institution is determining and paying compensation in a manner that is compliant with applicable law?
- How effectively does our committee facilitate presidential evaluation? When was the last time we updated our annual assessments or comprehensive assessments?
- Is our committee work aligned with our institution’s strategic vision, goals, and priorities?
- How transparent is our committee with the full board? Do we effectively provide reports and recommendations for action by the full board?
- Do our committee members possess business acumen or experience in the human resources arena? If not, are there board members outside the committee we should consider inviting to join?
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