Protiviti’s Jim DeLoach discusses one of the more pervasive issues falling within senior management’s and the board’s purview. Performance relates to virtually everything important: execution of the strategy, the customer experience, investor expectations, executive compensation and even senior management and the board itself. Accurately measuring it is critical.
Performance management is so
integral to the functioning of executive management and to the oversight of the
board of directors that it’s easy to forget that it, too, is a process. Like
all processes, it can be effective or ineffective in delivering the desired value.
Given the complexity of the global marketplace, the accelerating pace of
disruptive change and ever-increasing stakeholder expectations, how should
executive management direct and the board oversee the performance management
process so that it is effective in driving execution of the strategy and incenting
the desired behaviors across the organization?
As the ultimate champion for effective
corporate governance, the board engages management with emphasis on four broad
themes: strategy, policy, execution and
transparency. Effective performance management touches each of these themes by
focusing outwardly as well as inwardly and looking to the future as well as to the