With an eye to enhancing the ability of both firms and regulators to use compensation data to prevent financial industry misconduct, the Financial Stability Board (FSB) on Monday launched a consultation on standardizing data.
Current practices for gathering and analyzing compensation data varies significantly across jurisdictions and firms, the FSB says in a news release.
This sort of data can provide both firms and regulators with important insights into the effectiveness of compensation programs at addressing misconduct risk, and potential areas of weakness.
The consultation document, Recommendations for consistent national reporting of data on the use of compensation tools to address misconduct risk, aim to establish the data that can help firms and regulators appropriately include conduct considerations in the design of their compensation and incentive systems; support the effective use of compensation tools to help promote good conduct or to hold individuals accountable for misconduct; and promote broader risk management goals.
The recommendations also seek to support the effective identification of emerging misconduct risks; and to ensure the alignment of incentives, risk and reward.
Comments on the proposals are due by July 6.