Learning Methods
A traditional classroom couples on-site learning with the added value of face-to-face interaction with instructors and peers. With courses and exams scheduled worldwide, you will be sure to find a class near you.
Highly Interactive
On-going interaction with instructor throughout the entire classroom event
Interaction with peers/professionals via face-to-face
Components (May Include)
On-site instructor-led delivery of course modules, discussions, exercises, case studies, and application opportunities
Supplemental learning elements such as: audio/video files, tools and templates, articles and/or white papers
E-course materials available two weeks prior to the course start date; printed course materials ship directly to the event location
One + Days
Varies by course ranging from one to multiple days
Technical Needs
Specific requirements are clearly noted on the course page
Virtual Classroom
Ideal for those who appreciate live education instruction, but looking to save on travel. A virtual classroom affords you many of the same learning benefits as traditional–all from the convenience of your office.
Highly Interactive
On-going interaction with instructor throughout the entire virtual classroom event
Interaction with peers/professionals via online environment
Components (May Include)
Live online instructor-led delivery of course modules, discussions, exercises, case studies, and application opportunities
Supplemental learning elements such as: audio/video files, tools and templates, articles and/or white papers
E-course materials available up to one week prior to the course start date. Recorded playback and supplemental materials available up to seven days after the live event.
Varies by course ranging from one to multiple sessions
Technical Needs
Adobe Flash Player
Acrobat Reader
Computer with sound capability and high-speed internet access
Phone line access
A self-paced, online learning experience that allows you to study any time of day. Course material is pre-recorded by an instructor and you have the flexibility to view content modules as desired.
Independent Learning
Components (May Include)
Pre-recorded course modules
Supplemental learning elements such as: audio/video files, online quizzes
E-course materials start on the day of purchase
Optional purchased print material ships within 7 business days
120 Days - Anytime
120-day access starts on the day of purchase
Direct access to all components
Technical Needs
Adobe Flash Player
Acrobat Reader
Computer with sound capability and high-speed internet access
Contact Sponsor
Paul Thompson
Phone: 1 44 01614322584
Contact by Email | Website
Sorry, you can't add this item to the cart.
You have reached the maximum allowed quantity for purchase in your cart or the item isn't available anymore.
Product successfully added to your cart!
View your cart
Continue shopping
Please note our website will be down this Friday, November 5 from 9pm ET – 11pm ET for routine maintenance. We apologize for any inconvenience.

The Rise of ESG’s Importance in Executive Compensation Programs

Editor’s Note: This is the third of a six-part, monthly series in Workspan Daily produced by Korn Ferry for the benefit of our readers and to encourage further discourse on topics vital to compensation professionals. Each article will address Korn Ferry’s “Top 10 Questions for Compensation Committees in 2021,” a publication produced at the beginning of the year.  

ESG is everywhere. In the past 12 months, environmental, social and governance (ESG) topics have popped up in more and more proxy statements, compensation programs, and investor presentations. Even the Securities and Exchange Commission (SEC) is taking notice; they may propose new rules for the disclosure of ESG information. ESG seems ubiquitous, but some of the more pointed discussions on the matter are happening in compensation committees right now.

With our own clients, we see that ESG is a topic at nearly every compensation committee meeting. Companies that are not yet using ESG in pay programs want to (or wonder if they should), and those already with ESG want to update and refine. In either case, committees are actively working on it.

There is, however, a common stumbling block in these committee discussions. The selection of an ESG metric is a challenging topic and it can be difficult to know where to begin. Does a company follow the lead of its peers? Are systems in place to measure progress against goals? Will a particular ESG metric be important five to 10 years from now? These issues breed discomfort, but metric selection is of critical importance, as it is one of the most external signals of a company’s commitment to ESG.

In most conversations with clients, the first ESG question a director often asks is, “What are our peers doing?” This is not surprising. Committee members want to know the terrain before setting out. However, this external view in conjunction with the broader cultural focus on diversity, equity and inclusion (DEI) has strongly influenced metric selection.

In the United States, Korn Ferry research shows that metrics with a lean toward DEI have gained significant traction in incentive programs during the last few years. While the promotion of diversity and inclusion through corporate action is unquestionably a social good, companies should not be treating these metrics like an add-on. Rather, any incorporated metric, whether it be DEI or something else, should be used to propel corporate strategy.

Instead of looking outward, companies should begin their ESG analysis by looking within. With any metric, particularly non-financial metrics, adoption should be done only after careful consideration of the long-term benefit to corporate strategy. While peer information is an important data point, corporations should not lose sight of their own strategies. 

Understanding which ESG metric fits into the corporate strategy begins with an examination of two questions. First, a committee should ask themselves what corporate actions would benefit internal and/or external stakeholders. Second, does the corporation expect to receive any long-term benefit in return? There may be multiple answers to these questions, but it is important that the committee be able to eventually articulate a clear external and internal benefit after adding the extra heft of an executive compensation metric.

While metric selection is particularly vexing at times, many questions still present themselves: short or long term, quantitative or qualitative, full disclosure or not, part of a scorecard or standalone? Many of these logistical questions can be answered by acknowledging where a company is on its ESG journey. For example, if a company is just starting out with ESG, perhaps a qualitative metric in a scorecard is the most appropriate.

We believe companies have aligned themselves with the following four general “strategies” when deliberating over ESG metrics:

  • Basic: The company has taken the first steps to understand the utility of an ESG metric. The metric is typically qualitative, in the annual incentive program, and not thoroughly disclosed to the public.
  • Progressing: There is a recognition that ESG is an expectation from the public. There are measuring systems in place and the reporting mechanisms are trusted. ESG metrics are still typically in the annual incentive program, measured quantitatively and may be used as a modifier.
  • Advanced: There is a recognition that ESG furthers corporate strategy. Metrics are quantitative and typically in the long-term incentive program, but they may be in the annual incentive program as well.
  • Leading Edge: ESG is foundational to the company’s purpose, and ESG success may be largely measured by financial outcomes. The company’s strategy is inseparable from ESG outcomes. Incentive programs may or may not include long-term, non-financial ESG metrics. For example, Tesla is often a company we cite to demonstrate this “Leading Edge” strategy.

It is important to note that there is no expectation of advancing through these strategies. Rather, each is standalone and describes typical behaviors of companies wrestling with how to incorporate ESG into their program. For example, companies with a “Progression” strategy may not need to or want to pursue an “Advanced” one.

We are in the midst of the biggest change to executive compensation in more than 20 years. The opportunity this change offers begins with the metric a company chooses. This signaling carries a powerful message to the outside world and should be considered in the context of corporate strategy and values. Given this, we believe ESG is going be a big differentiator for many companies.

And that is why we think ESG is here to stay. It is everywhere for a reason.   

About the Authors

Kurt Groeninger is a senior principal, executive pay and governance, at Korn Ferry. 

Todd McGovern is the senior client partner, executive pay and governance at Korn Ferry.

About WorldatWork

WorldatWork is a professional nonprofit association that sets the agenda and standard of excellence in the field of Total Rewards. Our membership, signature certifications, data, content, and conferences are designed to advance our members’ leadership, and to help them influence great outcomes for their own organizations.

About Membership

Membership provides access to practical resources, research, emerging trends, a professional network, and career-building education and certification. Learn more and join today.