At the first-ever WCD Global Institute, a gathering of women board directors from around the world that convened recently in New York, risk topped the agenda as the most pressing issue facing boards today, according to a press release.
WCD, a global organization of over 1,000 women directors representing 1,200 companies from 32 chapters around the world, developed the Global Institute for women directors to share ideas and strategies.
The opening panel, “Complexity and Risk,” addressed how risk is affecting everything from executive compensation to the threat of some companies’ violating laws and regulations to achieve sales growth.
While board audit committees were the “hot seats” post-Enron, today compensation committees have taken on that role, said panel members. Panelist Maria Elena Lagomasino, CEO of GenSpring Family Offices and Chair of the board compensation committees for both Avon and Coca-Cola, explained how the comp committee drives corporate culture: “It is a very important place to be right now because I do think we can be the change we want to create, and compensation is a really important way to shape behavior.”
Catherine Allen, Chairman and CEO of financial consultancy The Santa Fe Group, explained that in helping to work on financial reform in Washington, “what we heard over and over from risk managers is that they were not heard. At the management level, they were not allowed to go to the board, or the board was looking the other way because everyone was riding the high of growth.”
Pre-crisis, she said, “the common kind of risk parameters really weren’t in place. However, “the comp committee has the power to change that,” she continued, because they not only can examine the compensation of CEOs, but also compensation practices throughout the organization.
“You can tell people to zig, but if you’re paying for zagging, that’s what’s going to happen,” said Ms. Lagomasino. “They’re going to zag, zag, zag all day long, and so you have to have compensation practices that are totally aligned with the values that you’re trying to create.”
For more information on the panel, go to http://www.womencorporatedirectors.com or email firstname.lastname@example.org.