The Evolving Structure and Role of Remuneration Committees – their purpose and effectiveness

25 June 2015

Eversheds Sutherland

Twenty years on from the Cadbury and Greenbury reports on Corporate Governance the role, structure and effectiveness of remuneration committees continue to attract comment and discussion in the ever changing corporate regulatory environment and wider economic arena.

Established to ensure that remuneration arrangements support the strategic aims of a business and enable the recruitment, motivation and retention of senior executives, it is timely to re-visit these objectives and research the evolving, structure, role and effectiveness of Remcos and consider the political impetus behind the concept compared with practical operational realities.

Twenty years on from the Cadbury and Greenbury reports on Corporate Governance the role, structure and effectiveness of remuneration committees continue to attract comment and discussion in the ever changing corporate regulatory environment and wider economic arena.

Established to ensure that remuneration arrangements support the strategic aims of a business and enable the recruitment, motivation and retention of senior executives while also complying with the requirements of regulation, it is timely to re-visit these objectives and research the evolving, structure, role and effectiveness of Remcos and consider the political impetus behind the concept compared with practical operational realities.

Carried out by Dr.Wendy Hirsh, our recent research draws on the experiences and views of a range of organisations and their key actors and stakehoders, addressing issues such as:

• How are the purposes and roles of Remcos evolving given the wider interest in governance, corporate culture, organisation performance and • executive reward?
• Do Remcos work within agreed reward principles and how do these reflect their businesses and the wider contexts?
• Do Remcos have effective capability, information and processes to fulfil their role and how do they make and communicate decisions?
• Are Remcos appropriately positioned relative to the Chairman, CEO and Board?
• How have Remcos changed and are there practices developing which should be adopted more widely?
• What are the future challenges and how are Remcos likely to respond?

Intended not only for reward professionals, this meeting was of interest to anyone involved in corporate governance, and looked at the realities of Remuneration Committees in an era of intense political and social scrutiny, commercial competitiveness and evermore demanding global competition for top executives.