INSEAD Directors Forum (April 2023)

The global talent market is undergoing major shifts as we journey into the post-pandemic world undermined by current geopolitical tensions. From hybrid working arrangements to forging purpose-driven organisations through organisational redesign, the global health crisis has accelerated the search for alignment between individual and organisational purpose. The focus on ESG issues has gained grounds and the criticism, in some cases, of top executives being “rewarded” while failing on their leadership responsibility has increased scrutiny on how boards of directors are responding in terms of talent and remuneration governance. More than ever, stakeholders are calling for greater transparency and equity to motivate change as new trends influence talent mobility and demands, and ESG targets continue to challenge status quo under an increasingly regulated business environment. The days of misaligned and disparate executive remuneration are no longer acceptable. The emergence of “Say on Pay” has paved the way for stakeholders to question how companies set executives’ remuneration to drive the appropriate behaviour and actions. New regulatory frameworks and social movements such as “Equal pay for equal work” are urging corporates to disclose their top executive remuneration and incentive plans including gender pay gaps to ensure fair practices and parity across the organisation. To navigate these paradigm shifts, boards of directors are to treat talent management, remuneration and risk alignment as an iterative process that evolves with the moving targets. It is paramount to develop an effective talent and remuneration strategy which is fit for purpose and integrated across the organisation. Boards need to mitigate the potential risks that can pervade through the remuneration structure and metrics. The Remuneration Committee has a critical role to play in finding the balance between two ends of the scale - attracting and retaining the right talents while motivating them to deliver sustainable long-term value rather than taking undue risks for short-term self-serving rewards. Organised by the INSEAD Corporate Governance Centre, the thought leadership forum on “Talent and Remuneration Governance for Impact” will examine the role of the board in setting optimal and fair executive remuneration packages while stewarding the ESG agenda and fostering robust leadership talent pipeline to support the vision of the organisation for medium to long-term strategic direction. Through presentations by academic faculty and panel discussions with guest speakers representing boards community and subject matter experts, we will glean insights from multi-faceted perspectives to understand the leading governance framework and approach for boards to put pay for performance and equity in practice and how they can be the driving force to promote transparent and fair remuneration both at board and executive level.