Research shows equity incentives introduce bias in executive recommendations and strategic planning. To counter this, boards should consider three key steps in assessing corporate risk.

Although using nonfinancial metrics like customer satisfaction has become increasingly popular in assessing executive performance and determining compensation, the practice has some significant drawbacks. Not all metrics apply equally to all industries. Companies considering such metrics for strategic performance management frameworks should be mindful of the importance of knowing their strength as lead indicators and applying them appropriately.

Corporate Social Responsibility “is fraught with contradictions, subject to political challenges and demands deep commitment,” argue José Carlos Marques and Henry Mintzberg. Responsible corporate behavior, they write, isn’t simply “doing well by doing good.” Instead, six changes need to be considered, within and beyond our private institutions. These changes include fostering ethical judgment within the enterprise, rethinking compensation and acknowledging the benefits of regulation.

Companies that are having trouble filling board positions should consider a new type of director: well-established professionals who devote all of their work, time and energies to corporate board activities.

Unlike traditional stock options, benchmarking performance to company-specific risk creates a more accurate incentive and reward mechanism.