Compensation committees that work: effective meeting practices allow compensation committee members to feel that they have done their jobs well. Here are 12 such best practices.

• Author: Romweber, Jane
• Position: Compensation Committees

HAS THIS EVER HAPPENED on your compensation committee? The committee met, and management presented a significant proposal. You and other committee members asked good questions, management seemed to have good answers and the committee approved the proposal. But things moved pretty quickly, and later on you thought of more questions. And then later, even more. Pretty soon, you weren't feeling as good about the committee's decision.

Or this scenario: The compensation committee over the years trusted that management's proposals were reasonable. But then the CEO turned up on several lists of chief executives who are paid more than they're worth. Meanwhile, like many outside directors, you feel under fire for high executive pay.

How could this have been avoided? Effective meeting practices would have helped, and have many advantages:

* They ensure that enough time is permitted to consider proposals in full, from several different angles, and to ensure that the proper information and expertise are brought to bear.

* They minimize potential conflicts between the committee and management.

* They increase the potential to keep executive pay at a reasonable level.

In short, effective meeting practices allow committee members to say with much greater assurance that they have done their jobs well.

The best bets

Based on our experience, here is a "top 12 list" of effective meeting practices to consider.

1. Have a preset committee calendar for the entire year, with topics indicated. The purpose of a calendar is so the committee is knowledgeable ahead of time about which topics will arise at each meeting. This enables them to form questions and shape the discussion. (We assume that compensation committee meetings occur regularly, generally in connection with full board meetings - that in itself is a best practice.)

2. Designate a management liaison to the committee. The purpose of designating a management liaison is to have a single point of contact, making communication between the committee and management easier. Usually, the contact is the VP of human resources, or a direct report to that position who is knowledgeable about executive compensation and has a broad view of the organization.

3. Ensure that the committee has input into meeting agendas. The committee chair should see agendas for regular meetings before they are finalized, in time to suggest changes or additions and to customize the length of the meeting to accommodate the subject matter. If...