How to Win in the Next Recession: What Boards Should Know About Preparing for and Innovating Through the Next Downturn

In brief: As we hit the midway point of 2020, the pandemic impacts are stark, and the United States is in an economic downturn. Boards have had to navigate the tandem crises of COVID-19 and a slowing economy. This brief, written by Grant Thornton and originally appearing in the 2020 Governance Outlook: Projections of Emerging Board Matters, delves into how a board can brace for a true recession while continuing to innovate through a crisis successfully.

This resource can help your board to

• prepare for a recession,

• innovate through an economic crisis, and

• evaluate management’s preparedness for an economic downturn.

Most relevant audiences: Lead directors, risk committee chairs, risk committee members, audit committee chairs, and audit committee members

The focus on the board’s compensation committee has never been sharper. The components of compensation plans and the link between compensation and company performance are under intense scrutiny from shareholders, employees, policymakers, the media, and other stakeholders. The Report of the NACD Blue Ribbon Commission on the Compensation Committee revisits NACD’s 2003 Report of the NACD Blue Ribbon Commission on Executive Compensation to highlight the new environment in which compensation committees—and, more broadly, boards—are now operating. It recommends that the compensation committee and board work together to establish an executive compensation philosophy that supports the company in creating long-term, sustainable value.

The report includes ten specific recommendations for compensation committees to consider when evaluating their compensation philosophies. It also provides practical tools, such as sample compensation committee charters, a compensation committee assessment, and guidance on executive employment contracts.