Dashboards or boards: in this age of information, hoards should not have to struggle to satisfy their curiosity and urge to get at the truth.

• Author: Delves, Donald
• Position: BOARD TRANSFORMATION

LAST YEAR, in this column, wrote about how the new generation of baby boomer board members is much more information savvy than prior generations and expects to have extensive data at its fingertips to support key decisions. Dashboards for boards is becoming a new buzzword.

Truly enlightening dashboards, however, are still a rarity. This is particularly true in the compensation committee.

Compensation committees tend to rely on a very limited set of data focusing on how much a firm pays its executives relative to other firms, and maybe a little data on how that company performs relative to those firms. This limited data provides a very narrow perspective, especially given the board's broad oversight responsibility and the importance of compensation in driving strategy and defining the firm's business model.

Imagine a comprehensive, beautifully summarized graphic dashboard for the compensation committee that allows committee members to answer such questions as:

* What is the total cost of leadership for the top several levels in this organization?

* What are the total salaries, annual incentives, long-term incentives?

* What is each component as a percentage of revenue, net income, EBITDA?

* How does each component vary, in aggregate with financial and stock performance?

* What percentage of value created for shareholders is shared with management?

* How effectively are we deploying shareholder resources to motivate and reward management?

* Are we getting what we are paying for? What is our return on leadership? What is our return on human capital?

* Can we demonstrate to the board and shareholders a direct, numerical connection between executive compensation and shareholder value?

* Can we demonstrate to the board and shareholders a direct, numerical connection between executive compensation and our purpose, mission and strategy?

In this age of information, boards should not have to struggle to answer any of these questions. All of this and more information should be available in concise, clearly summarized and well-sup ported dashboards. It is very important to know how well your company pays its CEO and top executives relative to other firms. It is equally, and perhaps more, important to know how much you pay all executives and managers and how your overall pay programs fit into your business model and strategy--and the precise role they play in how the company makes money and creates value.

This gets to a broader issue: the limited...