Report of the NACD Blue Ribbon Commission on Performance Metrics
Monitoring corporate performance is a vital function of every board. Establishing meaningful metrics — particularly around compensation — may be one of the most challenging tasks directors face. This publication provides helpful advice for creating and monitoring the financial and non-financial metrics that are critical to the success of any enterprise.
This report includes the following Commission recommendations:
- Understand and agree on the company's key performance objectives
- Establish performance metrics to cascade throughout the entire enterprise
- Track company performance against metrics on an ongoing basis
- Establish consistent and appropriate executive performance metrics
- Rate executives based upon performance as measured by appropriate metrics
- Communicate with shareholders regarding how the company has paid for performance