Key performance indicators (KPIs) are frequently used to evaluate corporate governance teams. Based on nearly 30 years of experience as Nasdaq’s Corporate Secretary, Joan Conley shares KPIs that are important for corporate governance teams in their role supporting the organization’s corporate governance, strategy, and purpose. While there are many KPIs, these three percolate to the top of the list.
The first KPI is engaging with and having support from institutional investors. This means support for all aspects of the organization’s corporate governance and environmental, social, and governance (ESG) programs, as detailed in the annual proxy statement, noted Conley. Engaging with the investment stewardship teams and institutional investors throughout the year is critical to receiving support for the proposals in the annual proxy statement.
The second KPI is a strong ESG ‘report card’ of crucial governance factors from proxy advisory firms like Institutional Shareholder Services (ISS) and Glass Lewis. It’s important for the ‘report card’ to indicate a positive rating and commentary on an organization’s ESG policies and programs, both collectively and individually.
“Individual reports on three the subcomponents, E [environmental], S [social], and G [governance], are important KPIs for every governance team,” said Conley. She added that there has been an increased focus on ESG—especially when it comes to environmental issues with a focus on carbon neutrality and energy usage, as well as social issues related to human capital management and diversity, inclusion, and belonging data.
Lastly, the third KPI is the board’s assessment of the corporate governance team and its ability to provide directors with advisory services, tools, and support. Annual feedback from directors and executives on the level of knowledge and support of the governance team is critically important and valuable, said Conley.
“At the end of the day, that’s what I was assessed on in my role as corporate secretary for many, many years,” shared Conley. She added that if there was a successful stockholder meeting during which all of the proposals got approved, it meant the proxy statement was clear, the governance framework was supportive of all the institutional investors’ initiatives, and the engagement sessions and board meetings were successful.
To help corporate governance teams improve and perform against these KPIs, Nasdaq offers tools, including board management software, board assessments, and ESG reporting. Learn more in another recent blog post about the Beneficial Tools to Support Corporate Governance Processes.
Board Portal Software
Nasdaq Boardvantage® Board Portal is the enterprise governance software for Boards and Leadership teams