Close
Learning Methods
Classroom
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.
Interaction
Highly Interactive
On-going interaction with instructor throughout the entire classroom event
Interaction with peers/professionals via face-to-face
Components (May Include)
Onsite
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
Duration
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.
Interaction
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.
Duration
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
E-Learning
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.
Interaction
Independent Learning
Components (May Include)
Pre-Recorded
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
Duration
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
Close
Contact Sponsor
E-Reward
Online
Paul Thompson
Phone: 1 44 01614322584
Contact by Email | Website
Close
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!
Price
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.
WORKSPAN
WORKSPAN DAILY |

Use the ESG Governance Funnel for Executive Incentives


metamorworks / iStock

Editor’s Note: Workspan Daily will be publishing a monthly executive compensation column from Willis Towers Watson for the benefit of our readers and to encourage further discourse on topics vital to compensation professionals.

In just about every board room, the topic of the day is ESG. Environmental and social issues are top of mind for many board members. In the United States, the focus has been more on diversity, equity and inclusion (part of the S in ESG), while in the United Kingdom, Western Europe, parts of Asia and Canada, the focus is more on environmental or climate-related issues (the E in ESG).

The intensity of board-level ESG discussions has picked up recently among the several hundred boards Willis Towers Watson advises, covering a wide variety of organizations. Many more boards are discussing ESG topics, more time is being taken discussing them, and there is more urgency and intensity in the conversation.

Quite often, boards or management ask whether the company should include an ESG measure or factor in its executive incentive plans. While approximately half of S&P 500 companies have an ESG factor in their executive incentive plans (and have for several years), this does not imply that companies are moving rapidly to add or expand ESG measures.

While companies and boards should take ESG issues seriously, they should proceed cautiously when adding them to incentive plans.

If an ESG measure is added to an incentive plan, it will typically be displacing another measure and take up a portion or percentage of the total incentive. There is only 100% to be divided among a small number of measures, most of which are critically important financial value drivers. So, this is precious real estate and should be used wisely and judiciously in ways that address the company’s most important issues. In other words, if an ESG measure is added, it should earn its way in by being strategically important to the future of the business.


Before considering whether an ESG factor should be included in executive incentives, it is important to take a much broader view, which can be visualized as an “ESG Governance Funnel.”

Management of ESG Issues. At the widest, top part of the funnel is the whole range of ESG issues the company is addressing. The range and depth of what management is addressing will always be much broader than what can be summarized and presented to the board. However, the board may direct management to expand, contract or reprioritize the range and depth of ESG issues it is taking on.

Governance of ESG Issues. One of the most important and pressing sets of issues for boards today is prioritizing which ESG topics are most important for the board to address, where they should be addressed (i.e., which committee, or the full board), how often to address them, and how to actually provide effective oversight. Providing effective oversight for an ESG topic typically takes extra time, requires board members with some expertise in the area, and must be done in the relatively time-constrained format of a board or committee meeting.

The range and depth of ESG topics and material covered by the board will be far narrower than what the company manages, but still has to cover the areas that are most strategically important to the organization, or those that pose the most significant risks, or both.

Disclosure of ESG Information. The next, narrower subset of ESG material is what the company decides to disclose to investors and the public. Given the increasing scrutiny of ESG disclosures by investors, rating organizations and regulators, it is important for management and the board to be in synch about what gets disclosed and how it gets communicated. Ideally, the board periodically reviews and discusses the programs and data that are summarized in public statements.

ESG factors in Executive Incentives. The smallest subset of ESG issues is those that earn their way into incentive plans. This entails being measured and tested by management, reviewed and vetted over multiple reporting periods by the board, and shown to be of significant value to the organization and investors.

Including an ESG measure or factor in an executive incentive plan sends a strong signal to the management team, the rest of the company, investors and other constituents. However, there are many ways to send strong messages. Incentives are powerful tools that influence performance and can accelerate or shift the direction of an organization. If an ESG measure is included, it should not only reflect something that is significantly important to the organization, it should be structured in such a way that it will influence and direct meaningful, sustained movement in that ESG factor or initiative. Otherwise, it is just window dressing, and a waste of valuable incentive plan real-estate.

About the Author


Don Delves is a managing director and North America practice leader, executive compensation, at Willis Towers Watson.


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.