Human capital management is key to sustained company success
The Covid-19 pandemic, economic turmoil, social unrest, and disruption caused by remote working. All these factors weighed heavy in 2020 and continue to impact the welfare of employees, causing boards and senior management to focus more on their workforces.
A new report from US think tank The Conference Board titled Brave New World: Creating Long-term Value through Human Capital Management and Disclosure explores how HCM is key to sustained success.
This report's insights and findings were generated through a series of meetings with more than 100 executives, as well as outside experts from private and public corporations.
New Securities and Exchange Commission (SEC) rules broaden the information companies are expected to disclose regarding human capital in their annual financial reports.
The report says companies are moving to meet these new requirements and the focus on HCM will unfold over time. Companies not only need a clear HCM strategy, but also enhanced governance practices and information to move from the workforce they have now to the one they need to achieve for future success.
Selected insights from The Conference Board report include...
Devote sustained time and attention to HCM and be prepared for strategy, practices, and disclosures to evolve over time
HCM is a complex topic that needs to be tailored to each company. Boards should evaluate their firm's current human capital capabilities and future needs, considering the adoption of a human capital strategy that supports the company's broader business strategy.
Companies should customize their HCM disclosures to reflect their business and human capital strategies, with reporting frameworks and regulations as a starting point for their discussion.
It will be important for companies to have a robust process for updating their disclosures as their understanding of HCM evolves, board practices mature, and industry practices and investor expectations change over time.
Boards have an increasingly important role to play in HCM
Boards can shape the workforce by hiring, firing, promoting, and compensating executives.
Each company will not only need to clarify and codify the roles of its board and its committees with respect to HCM, but also ensure that boards exercise their powers in a coordinated manner. Boards should have an in-depth understanding of the corporate culture and its role in the overall HCM strategy.
"Workforce issues have often been an episodic priority for boards – particularly after mergers, scandals such as #MeToo, or during the current pandemic," said Paul Washington, Executive Director of The Conference Board ESG Center.
"The workforce now needs to be a sustained strategic priority for corporate directors. That requires taking a fresh look at the board's governance practices, the information it receives, the disclosures the company makes, and how the board can leverage its multiple powers to help drive the company's workforce strategy."
HCM matters to many other constituents, including investors who see HCM issues as essential to sustainable long-term value creation, as well as employees, consumers, and the public.
"Now, the workforce is not only recognized as a valuable intangible asset for companies but regarded as a critical stakeholder; enhancing the welfare of the workforce is part of the purpose of the corporation," added Rebecca Ray, Executive Vice President , Human Capital at The Conference Board.
"Given this – and the clear relationship between HCM and corporate performance – it stands to reason that HCM should be front and center for boards and management and viewed as a fundamental driver of economic value for organizations."
People Moves Americas: JPMorgan, Crowe, Automation Anywhere
Discover the latest hirings and promotions in this week's roundup of executive transitions across North America.
James Budge named Automation Anywhere’s new CFO
A seasoned technology, enterprise software and cloud executive with over 25 years of experience, James Budge has joined RPA leader Automation Anywhere as Chief Financial Officer. Budge brings to the firms decades of experience as a CFO at both public and private firms and has prepped three companies for IPOs and led multiple secondary public offerings.
Having served as COO and CFO at Genesys and as COO/CFO at Rovi, both companies with revenues in excess of US$1bn, Budge most recently served as CFO at Pluralsight, where he led the company through an IPO and increased its revenues 400%. In this new role, Budget will lead finance, investor relations, legal and IT management and importantly will ensure the copany has everything in place to become a public company.
Steve duMont joins General Motors as President
Former intelligence exec Steve duMont has been named the new Presdient of General Motors’ Defense Business. With two decades of defence industry experience, including 13 years in the intelligence and space segment of Raytheon Technologies, duMont also has a number of years bagged with BAE Systems and Boeing as well as serving with the US Army for eight years as a pilot. As President, duMont is tasked with leading GM as it supports defence and government customers through its capabilities and offerings.
Kjel Christensen rejoins JP Morgan to head trade finance sales
Having previously spent three years in a VP role at JP Morgan, Kjel Christensen is set to rejoin the firm following a seven-year hiatus, but this time as trade finance sales lead for the firm’s North America corporate and investment bank consudmer and retail portfolio. Christensen joins from working capital solutions provider Taulia, where he spent the best part of seven years, most recently serving as MD for Americas and APAC. He’s also had leadership roles at American Express and Costco. In this new role, located in Utah, Christensen is taksed with driving the firm’s ambitious trade and working capital finance targets fro the sector.
Chris Goodman named Chief Marketing Officer at Crowe
Seasoned marketing exec Chris Goodman is set to take the marketing reins as CMO at accounting, consulting and tech firm Crowe. With more than three decades of experience developing integrated marketing programs, Goodman has held CMO roles at both KPMG and Accenture and has served as an executive vice present at Young & Rubicam and as a senior VP at IMG.
Most recently, Goodman led his own marketing consulting firm and brings to the team a “proven track record, strategic vision and a global mindset”, says Crowe’s CEO Mark Baer, which will be “instrumental in helping us shape a better tomorrow for our people, our clients and the firm”. Holding an MBA from Columbia, and currently an exectuve coach at the Cornell Johnson Graduate School of Management, in this new role, will be tasked with leading the firm’s marketing and communications organisation.