At Reward Value we aim to design and implement a sustainable executive remuneration system worldwide. In order to come to a solid method to develop this, all of our projects are based on scientific research and tools. We work together with universities, scientists and institutes to get the insights we need. And now we are very proud to announce a new partnership with the Diligent Institute (US)!
“Frederic is this really thoughtful guy who is very interested in how companies design their executive compensation plans and whether this executive compensation plans are in fact actually doing anything”
Diligent Institute develops software to organize administrative processes within companies. To make communication between board members secure and smooth, board portals are designed. These contain all functions to make communication more efficient, so the board can focus on their core business.
The conviction barometer
In partnership with the Diligent Institute, we are developing an AI-powered tool, the conviction barometer, to assess the extent to which firm attitudes, attention and actions align – both internally (does the firm do what it says it does) as well as externally (are firm views on material stakeholder interests similar to those of the stakeholders themselves) and is such alignment reflected in CEO remuneration design. This assessment of alignment or conviction will help us to better understand whether companies focus on the right issues (the relevance of the sustainability topics is checked against the SASB materiality map), have embedded these issues in their incentive designs, and whether management is empowered to drive long-term societal value creation (as measured in Reward Value’s impact yardstick methodology).
The need for such a tool is pressing for several reasons, but not in the least because ‘impact’ may be a slow-moving variable. Pivoting to a green business model takes time, and the effects of that will only become apparent in the impact assessment after an implementation lag. Until the pivot is finalized, there still is a need to track progress and to truly assess CEO performance. The conviction barometers may be one tool to track firm attitudes, attention and actions in support of aligning purpose, performance and pay.
“A fruitful relationship”
The future of compensation
In ‘The Corporate Director podcast’ Frederic Barge talks with Dottie Schindlinger (Executive Director of the Diligent Institute) and Meghan Day (Senior Director of Board Member Experience for Diligent Corporate) about the mission of Reward Value. They will discuss topics like recent and upcoming research on the future of executive compensation and the importance of long-term value creation and tying that to executive remuneration.
We are excited about the partnership with the Diligent Institute and look forward to a pleasant collaboration!