Boards need to put people first
They have to set the tone at the top, and are increasingly assuming accountability for corporate culture.
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IN this age of increasing shareholder activism, investors are calling for stronger board oversight of executive compensation, succession planning, gender equity, corporate culture, and organisation development issues.
For instance, in his annual letter to CEOs of all investee companies, BlackRock CEO Larry Fink highlighted the importance of stakeholder engagement and social purpose in ensuring sustainable, long-term growth and profitability. The key linkage between purpose and profit is the prioritisation of human capital, he noted. "Attracting and retaining the best talent increasingly requires a clear expression of purpose," he said.
Yet, most boards do not spend as much time and effort addressing human capital issues - as they do their financial and intellectual capital. In fact, a company's people policies and practices are crucial to ensuring that it can attract, retain, and motivate key talent.
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