UPFRONT : Pay execs for long-term performance?

The notion of corporate sustainability is getting some high-level encouragement across the Tasman with parliamentary committee suggesting that the pay of top executives be determined not by how much they earn for shareholders but how they position their firm for the future.
After deliberating for year, the Joint Committee on Corporations and Financial Services opted to avoid formal compliance pressure and instead came up with 29 separate recommendations designed to encourage better behaviour on the corporate responsibility front – ie, paying greater mind to the long-term economic, social and environmental impacts of their activities.
Amongst these are proposals that instead of basing remuneration packages on short-term performance, executives be financially rewarded for long-term outcomes, that listed companies be required to state their top five sustainability risks, and that special Corporate Responsibility Network (based on overseas models) be created to help companies lift the collective level of Australia’s corporate responsibility performance.
The voluntary compliance approach went down well with business groups with one reportedly welcoming the avoidance of “heavy-handed” judgements and describing the recommendations as “win for both community and business”.