BoardTalk event: an insider’s guide to the compensation committee 

Information asymmetry is not a flaw – it’s a feature

One of the first themes the panel surfaced was information asymmetry. Management lives inside the business every day; board members do not. That gap is structural, intentional, and unavoidable, but how it is managed determines the quality of decisions. 

Dan Ryterband noted that directors often underestimate how much preparation happens before a committee meeting convenes. “The majority of the compensation committee’s work is done in advance,” he observed. “If you come into the meeting without having read the materials carefully, or without clarity on what really matters, you’re already behind.” 

At the same time, asking questions is not optional. The challenge is knowing which questions move the discussion forward. As Ryterband put it, the most effective committee members “ask the questions that aren’t answered in the book – the ones that go to leverage, symmetry, and balance , not the ones that simply restate what’s already been presented.” 

The CHRO’s role: credibility, translation, and trust

From the management side, Julie Sheffet emphasized that the CHRO plays a critical role in enabling good committee outcomes. The job is not to “sell” a recommendation, but to ensure the committee has the right context, data, and line of sight into how decisions will land across the organization.

“Trust is everything,” Sheffet said. “If the committee feels surprised by an outcome, by an employee reaction, or by something that shows up after the fact, that trust erodes quickly.” In her experience, credibility is built through transparency, consistency, and a willingness to surface issues early, even when they are uncomfortable.

Sheffet also highlighted the importance of translation: helping directors understand how compensation programs connect to talent, culture, and execution on the ground. “Pay decisions don’t exist in a vacuum,” she noted. “They send signals. Employees read meaning into them whether we intend them to or not.”

The advisor as interpreter, not just a benchmarker

Dan Ryterband cautioned against viewing the compensation advisor as a technical vendor whose primary role is to provide benchmarking data. While market data matters, committees increasingly rely on advisors to help evaluate alternatives, anticipate reactions, and pressure-test assumptions.

“Benchmarking tells you where others are,” Ryterband said. “It doesn’t tell you what’s right for your company in this moment.” In his experience, the most effective advisors help committees navigate tension – between stakeholders, between short and long-term objectives, and between simplicity and precision.

He also noted that the advisory landscape itself has evolved. Committees now expect a broader perspective on succession, leadership capability, and emerging issues such as workforce strategy and technology – areas that were once well outside the traditional compensation remit.

An expanding mandate

Across the discussion, one point was clear: the role of the compensation committee has expanded significantly. What was once a largely transactional function now sits at the intersection of strategy, talent, culture, and governance.

Committees are being asked to weigh in on succession planning, leadership development, and workforce engagement  – often with limited meeting time and heightened expectations. That expansion makes judgment, preparation, and trust even more critical.

As Markus reflected, “You can’t approach this work as a once-a-quarter exercise. The decisions are too important, and the outcomes help drive the company’s strategy and success.”

Advice for first-time committee members

Asked what advice they would offer to directors new to the compensation committee, the panelists converged on a few core principles: do the work in advance, ask the questions that truly matter, and be prepared to engage constructively in difficult conversations.

Perhaps most importantly, they emphasized humility. “You’re not expected to have all the answers,” Ryterband noted. “But you are expected to care enough to understand the implications of the choices you’re making.”

In a governance environment defined by complexity and scrutiny, the compensation committee remains one of the board’s most consequential forums. As this BoardTalk discussion made clear, getting to “yes” is rarely simple, but when done well, it is one of the clearest expressions of effective board stewardship.