The Evolving Relationship Between Compensation Committees and Consultants

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When using information and services from outside consultants, compensation committees should ensure that contractors are independent of management and will provide objective, neutral advice. At a minimum, the committee must control all aspects of the relationship, including retention, scope of work, oversight, and possibly dismissal. If a consultant provides services to management as well, role and scope of work should be clearly articulated and monitored by the compensation committee.

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