where each director sits, and what they own
Corporate governance and the board table
The board is the bench. The committees are juries. Each seat carries a fiduciary duty owed to shareholders — not to the CEO who sometimes also occupies the chair. CHRO is the witness called by the compensation committee.
Three committees, three jurisdictions
audit committee
Financial integrity
SOX 2002 requires 100% independent members and at least one financial expert. They own the relationship with the external auditor, internal controls attestation, and the financial statements that go into the 10-K. CFO presents; CHRO doesn\'t, except on workforce-related disclosure questions.
compensation committee
Executive pay
Dodd-Frank §952 requires 100% independent. Owns CEO comp, equity plans, Say-on-Pay frequency, the clawback policy, and the proxy CD&A narrative. CHRO is the management witness here— presenting directly, not through the CEO.
nominating & governance
Board composition
NYSE and Nasdaq listing rules require 100% independent. Owns director succession, board skills matrix, ESG oversight at the board level. CHRO supports — pulling pipeline data, advising on diversity targets — but doesn\'t lead.
the line the exam tests
CHRO reports to the CEO. CHRO presents to the comp committee.
The reporting line and the presentation line aren\'t the same. The presentation line gives the CHRO standing to walk into a room the CEO isn\'t in. That\'s why exec comp scandals get caught; that\'s why the senior HR seat exists at this altitude.
Exam Traps
Independent directors are NOT employees or material vendors
NYSE and Nasdaq define independence by absence of material relationships. The exam tests this strict definition.
CHRO reports to CEO, not the board
But CHRO presents directly to comp committee. Reporting line vs presentation line are different. The exam tests this nuance.
Lead director vs non-executive chair
When CEO is also chair, a lead independent director is appointed. Separation of chair and CEO is the alternative governance design.
Board succession is governance, not just HR
The Nominating/Governance committee owns board succession. CHRO supports but does not lead.
Comp committee composition matters
Comp committee must be 100% independent under SOX and Dodd-Frank. The exam tests this requirement.
Charters define authority
Each committee has a charter defining its authority, composition, and reporting. CHRO works within the comp committee charter.
Sets strategy, oversees CEO, represents shareholders. Fiduciary duty.
CEO, CFO, CHRO, CLO present matters under their authority to the board.
Audit (financial integrity), Comp (executive pay), Nominating/Governance (board composition).
Ensures process integrity. Calls executive sessions.
Records minutes. Files Form 10-K, Form 8-K, proxy.
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