Top 2011 Issues for Directors and CEOs

by Gary Larkin for The Conference Board – The Governance Center Blog, December 21st, 2010.

As company holiday parties wind down and executives prepare for what next year may bring, that can mean only one thing in the corporate governance world: time for Top 10 lists for 2011.

Of the four major lists I could cull, only one actually lists 10 items. For the most part, these lists are more a compilation of issues and challenges facing directors and C-level executives in the coming year. In lieu of a Top 10 list this year, I figured I would focus on the top issues that I have seen in lists from four organizations. They are KPMG’s Audit Committee Institute (Ten To-Do’s for Audit Committees in 2011); the law firm of Wachtell, Lipton, Rosen & Katz (Some Thoughts for Boards of Directors in 2011); PWC (2011 Current Developments for Directors); and executive search firm and consultant Heidrick & Struggles (10 Key Challenges for CEOs in 2011).

If you want to compare this year’s list to last year’s, look at my blog post from January 8.

Here is a breakdown of the issues and challenges for this year’s lists:

Executive Compensation

“Executive compensation continues to be a major area of regulatory focus and public debate, and the Dodd-Frank Act and related SEC rules include several notable developments that boards and compensation committees will need to take into account. …Boards and compensation committees should review compensation policies with great care, being mindful of pay-for-performance principles while also seeking to avoid policies that will encourage excessive risk-taking. Directors should also bear in mind the heightened sensitivity to pay packages that could be deemed ‘excessive’ given the new post-crisis emphasis on financial restraint.” (Wachtell, Lipton, Rosen & Katz)

Risk Management (…)
Corporate Governance Compliance and Culture (…)
IT Governance and Social Media (…)

(continue reading… )

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