CHAPTER 11
IS A PAY FOR PERFORMANCE SYSTEM RIGHT FOR YOU?
“There’s nothing more unequal than the equal treatment of unequal people.”
—Thomas Jefferson
When you think about the saying, “To steal second base, you must take your foot off first base” you may also think to yourself, “Yeah, and you can be thrown out if you do!” To determine whether a pay for performance compensation system (one in which pay decisions are based on defined performance levels rather than on entitlement, tenure, or other non-performance-related criteria) is right for you, you must be clear about what you hope to accomplish by having one. You must also be aware of the challenges and potential risks in moving to pay for performance.
PAY FOR PERFORMANCE CHALLENGES
Rich Rinehart, managing owner of Grant Owners and consultant to professional services firms, shared with us what an owner in a large regional firm in the Midwest told him, “I had the best year in my career last year. I sat down with our managing owner to go over this year’s bonus and my base compensation for next year. I was elated with the result, the most money I’ve ever made. Then I asked to see the owner compensation schedule.”
Rinehart believes whether you like it or not, compensation is absolute and relative in CPA firms, especially in the owner ranks. When firms move to performance-based compensation systems, they will necessarily compare one owner to another. As competitive creatures we all want to know how we did relative to our peer group. It has also been our experience there is an unwillingness and fear to look at one’s own performance and performance relative to each other as owners. Human beings seem conflict-avoidant by nature, so the idea that we must talk about our compensation as an owner group or in individual meetings with managing owners strikes fear in the hearts of many CPAs. It’s what often keeps many firms from changing their compensation structures from a traditional and increasingly archaic system. By working with owner groups on performance and compensation issues, we know we must help them look in the mirror or they may never change. For some firms, they must address pain (for example, poor performance or low compensation). For other firms, they want to address opportunities and need to develop strategies and goals to achieve them. Both scenarios often create the motivation to change their compensation systems.
We tell our clients to benchmark their financial performance against prior years, budgets, projections, competitors, and industry surveys. We tell them they need to compare where they are relative to their plans, their competition, and their industries. They are sometimes terrified to know the answers, and at the same time, cannot stand not knowing the answers. They want to know how they stack up relative to their fellow owners or relative to their CPA colleagues in other firms.
As firms move from traditional compensation systems to performance-based systems, they increasingly face the issue of owners comparing themselves to each other. There is a raging debate in firms today about whether to use open or closed compensation systems. Either way, comparison exists because owners (and employees) often know what others earn. Confidentiality about compensation is an illusion. When firms are looking at both objective, measurable factors as well as subjective, “soft” measures to determine owner compensation, developing reports that compare owner performance and compensation is key to driving and improving performance over time. The ultimate test of any compensation system is whether it will stand up to the scrutiny of the “absolute-relative” test by their owner groups.
Rinehart also provided us the following quote from one of his clients, the managing owner of a “top 100” firm:
As long as I’m managing owner in this firm we will have an open owner compensation system. Owner bonus time is the one time during the year when I can sit down with each of my owners and explain to them how they are doing and what they need to do to improve. Our performance-based compensation system is the best tool I have to present the facts about performance in both absolute and relative terms.
This managing owner is obviously willing to have the difficult conversations that go along with owner compensation. Imagine football, basketball, or baseball games in which the score is not kept. How would it be to watch the games? What if there was no winner or loser, and at the end of the season, there was no Super Bowl, NBA Final, or World Series? In top performing firms, owners want to know where they stand and what they need to do to improve. Why not take the conversation about performance and compensation as an opportunity to do better next year? Help them understand how their performance influences their compensation.
In previous chapters, we discussed goal setting and aligning with firm vision, strategies, and goals. When we test our new compensation systems by exposing the “truth” about performance, both individually and as an owner group, we will necessarily come to the realization that no one person can carry the firm or be responsible for its success. As in sports, firm performance requires the efforts of a highly functional team. Relative compensation and well-designed compensation systems, like the performance they measure, tell you how you are doing. The reaction to how a group of owners performed in any given year should be cause to ask the question, How can we help each other do better next year? The notion that “rising tides float all boats” is worth pondering. If we see how others are performing and can help them perform better, we all make more money. In the end, by sharing absolute, as well as relative, compensation information, the understanding we gain about ourselves, our firms, and the future is worth the risk of offending someone or hurting their feelings. We cannot improve what we do not measure, and if we do not share it, debate it, and find out the truth about it we will never achieve the results we are looking for. Top firms know this is true and their results prove it.
PERFORMANCE-BASED COMPENSATION IS NOT A SILVER BULLET
Before we talk about performance targets, we must acknowledge the fact that there are as many consultants and practitioners who decry pay for performance systems as there are who support them. Even David Maister, a well-respected consultant to the accounting profession, said as recently as April 2006, “The disadvantage of pay for performance compensation systems is that they provide a wonderful excuse not to manage . . . By not paying for performance, you end up with higher performance by tackling performance issues.”
Harvard Business School professor Michael Beer, has said, “Scholars have argued that the real problem is that incentives work too well. Specifically, they motivate employees to focus excessively on doing what they need to do to gain rewards, sometimes at the expense of doing other things that would help the organization.”1 Alfie Kohn, author of Punished by Rewards: The Trouble With Gold Stars, Incentive Plans, A’s, Praise, and Other Bribes, says rewards may actually damage quality and productivity, and cause employees to lose interest in their jobs. Why? According to Kohn:
▮ Rewards control behavior through seduction. They are a way for people in power to manipulate those with less power.
▮ Rewards ruin relationships. They emphasize the difference in power between the person handing out the reward and the person receiving it.
▮ Rewards create competitiveness among employees, undermining collaboration and teamwork.
▮ Rewards reduce risk taking, creativity, and innovation. People will be less likely to pursue hunches, fearing such out-of-the-box thinking may jeopardize their chances for a reward.
▮ Rewards ignore reasons. A commission system, for example, may lead a manager to blame the sales staff when they do not meet quotas, when the real problem may be packaging or pricing.
“Managers typically use a rewards system because it’s easy,” adds Kohn. “It doesn’t take effort, skill or courage to dangle a doggie biscuit in front of an employee and say, ‘Jump through this hoop and this will be yours.’”2
While we agree that all of the above comments by these authorities may be correct, we also agree with Jim Collins’ findings in Good to Great: Why Some Companies Make the Leap . . . and Others Don’t that a good compensation system helps recruit and retain great performers. A properly structured pay for performance system, therefore, may be the best thing out there. The goal of a pay for performance system is not to have the perfect system, but to better align compensation with performance and with the firm’s strategic initiatives.
GETTING STARTED—DIAGNOSE BEFORE YOU DESIGN
There is, of course, no one right system for every firm. To develop the best system for your firm, utilize the framework of the Organizational Effectiveness Cycle (OEC), which we discussed in Chapter 3 to perform a diagnostic. Then consider (and answer!) the following questions:
▮ What specific results are you trying to get?
▮ What specific results do you want employees to get? (Refer to cascading goals.)
▮ What behaviors are needed from employees to get those results?
▮ What behaviors are you currently observing in your employees?
▮ What causes employees to refrain from engaging in the needed behaviors? (These causes are often called roadblocks.)
▮ What are you doing as a firm to motivate needed behaviors and remove roadblocks?
▮ Why are you doing each of the things you are doing?
The answers to these questions should serve as the necessary building blocks for constructing an effective compensation system—one that drives the results you identified by answering the first question. As you design your compensation system, you want to keep in mind the goals and attributes of an effective compensation system.
GOALS AND ATTRIBUTES OF AN EFFECTIVE COMPENSATION SYSTEM
Without a doubt, all firms are interested in significantly enhancing their ability to serve clients and other key stakeholders. The overarching goal of a compensation system is to encourage and motivate a full range of behaviors needed to do so. And to do so profitably, firms want work to flow where it will be done best, most quickly, and at the lowest cost (which achieves the most value for clients). Another common goal of a compensation system is to enable an organization to attract and retain qualified, competent workers. It should encourage capable senior associates and managers with an interest in firm ownership to want to become owners, to allow those who are capable and do not have an interest in ownership to be rewarded appropriately, and to encourage productive team members to stay with the firm until retirement. One of the ways it does this is by recognizing all types of contributions to the firm’s success.
Finally, many firms want their compensation systems to be perceived as fair and equitable by those who are subject to it. For a plan to be successful, regardless of its implementation, employees must:
▮ Desire more pay
▮ Believe they will receive more pay if they improve their performance
▮ Trust the firm to administer the plan fairly
BUILDING A PAY FOR PERFORMANCE PLAN
By now you know there is no such thing as an off-the-shelf compensation plan. Here is a list of items to consider when building your plan:
▮ Who will participate in the plan (all employees or just owners)?
▮ How will the payouts be determined?
▮ How often will you make payouts?
▮ Will there be thresholds in order to get paid the bonus?
▮ Who will be responsible for administering the plan?
▮ What will your measures be?
▮ What will your targets be?
▮ How will you pay for the plan?
▮ Will the plan have any hold-back provisions?
An effective performance-based compensation plan rewards three areas that drive performance and results. Each of these reward areas is discussed in the following sections.
Rewards Both Character and Competence
Stephen R. Covey, in his highly acclaimed book, The 7 Habits of Highly Effective People, shares that personal trustworthiness is a combination of both character and competence. He quotes Gandhi as saying, “One man cannot do right in one department of life whilst he is occupied in doing wrong in any other department. Life is one indivisible whole.”3 When it comes to character, James F. Bracher, self-professed architect for the renewal of integrity-centered leadership, says, “Integrity-centered leadership is the only reliable foundation for long-term success!” Compensation should be tied to employees’ demonstration of traits such as accountability, courtesy, determination, integrity, kindness, patience, respect, tolerance, and so on. It should also reward whether employees exhibit congruence between what they say and what they do, as well as what they say about what they did.
In addition to character, however, we must also consider competence. In his book, Customers for Life, Carl Sewell asserts that being nice to people is just 20 percent of providing good customer service. He also says, “All the smiles in the world aren’t going to help you if your product or service is not what the customer wants.” Sewell further asserts that companies must design systems that allow you to do the job right the first time.4 Most firm leaders would believe he is talking about work processes related to service delivery.
We believe training and development, performance management, and compensation systems are also necessary to facilitate an environment of empowerment in which employees can do it right the first time. Alexander L. Gabbin agrees. In his article, “The Crisis in Accounting Education: the CPA’s Role in Attracting the Best and the Brightest to the Profession,” he says, “Unlike the academic community, CPA firms were quick to realize that new business realities demanded a broader set of competencies.”5
When we work with accounting firms, we find that firm leaders know what to do with employees who are either high in both character and competence or low in both character and competence—reward or terminate them respectively. The tough decisions arise when someone is high in character but low in competence, or low in character but high in competence. Firms are often tempted to retain those with high character and low competence because these employees are nice, and they hope their work product will get better over time. They are also tempted to retain those with low character and high competence because they produce high quality work in a timely fashion, even though they wreak havoc by making others miserable, or worse, place the firm at risk.
Based on effective evaluation, owners and employees can be placed in one of four quadrants, as illustrated in Exhibit 11–1, “The Character and Competence Matrix.” Again, we hope everyone falls into quadrant 2. If not, however, it is easiest to help individuals move from quadrant 1 to quadrant 2. In the case of employees who reside in quadrant 1, we suggest a formal, individual development plan tied to compensation which gives employees a chance to improve competence over a relatively short (6 to 12 months) period of time.
In the case of employees who reside in quadrants 3 and 4 (low in character in both cases), it can be difficult to move them to either quadrant 1 or 2 respectively, regardless of the efforts to do so, including a formal, individual development plan tied to compensation that gives them a chance to improve in character. We argue it is key to ensure, during the hiring process, that potential employees are screened based on character attributes so there is less need to deal with a lack of character after employment. When it becomes necessary to do so, however, we suggest a plan for immediate and gracious departure if improvements in character (alignment with the firm’s core values) are not forthcoming.
Rewards Both Leading and Lagging Measures of Success
When it comes to effective performance, it is important to understand the cause and effect between the varying behaviors and activities that help individuals achieve their desired results. To get a better handle on cause and effect, we suggest a combination of both leading and lagging measures or indicators of success. Traditional individual accounting measures (for example, realization, utilization, new revenue, and so on) are lagging indicators of performance, and they report historic events. They represent the outcomes of actions that were taken in the past. In contrast, nonfinancial measures can be leading indicators of performance. Leading indicators usually measure processes and activities—those things that lead to (or drive) the lagging indicators. They often predict whether lagging measures will be achieved. For example, a decline in marketing-related activities is expected to lead to lower numbers of referrals from referral sources, and eventually a decline in new revenue. By the same token, an increase in strategic reviews of key clients is expected to drive more and deeper conversations with these clients about ways we can help them, and eventually an increase in cross-sold services.
Effective performance management is not just about collecting the right data. It is also about using data effectively to drive performance. Combining leading and lagging indicators provides executives with the tools they need to achieve this.
Rewards Both Independent and Interdependent Behaviors and Outcomes
Stephen R. Covey points out in The 7 Habits of Highly Effective People, “As we continue to grow and mature, we become increasingly aware that all of nature is interdependent, that there is an ecological system that governs nature, including society.” Independence is the paradigm of I—I can do it; I am responsible; these are my goals. Interdependence is the paradigm of we—we can do it; we are responsible; these are our goals. When firms reward independence, they reward people for being self-reliant, developing their personal knowledge and skills, and hitting agreed-upon personal goals and objectives. When they reward interdependence, they reward people for being team players; developing others’ personal knowledge and skills; and hitting agreed-upon team, departmental, or firm goals and objectives.
Covey goes on to say, “Interdependence is a choice only independent people can make. Dependent people cannot choose to become interdependent. This is a primary reason for rewarding independent behaviors. If we reward people for making good choices about their day-to-day behaviors, carrying out personal development plans, and accomplishing things that matter most, they develop a sense of personal value and contribution. This helps to increase their maturity even further and facilitates their choices about teaming with others to accomplish interdependent goals/objectives.” The key is for the firm to be clear and specific about those interdependent goals and objectives.
When firms reward both, which is a more advanced concept, people begin to realize they can accomplish more by working together. When firms create an environment in which teamwork is encouraged and rewarded, a culture of true empowerment can be created.
STRUCTURING A PAY FOR PERFORMANCE COMPENSATION SYSTEM
Now that we have discussed what a performance-based compensation should reward, we will discuss how to do it. How do you measure character, competence, and successful goal accomplishment so you can reward owners and staff?
To measure the subjective “character” component, we suggest clarifying the firm’s core values and defining what it looks like when employees are living them. This helps to take some of the subjectivity out of the measurement. To measure the also-subjective “competence” component, we also recommend clarifying and outlining the competencies one needs to perform his or her role in the firm. When measuring them, you will not evaluate whether individuals are using these competencies to help them accomplish independent or interdependent goals and objectives—only whether they have the competencies. By measuring “adherence to the firm’s core values” and “development of competencies” you are measuring two wildly important leading indicators of success.
To measure “performance” objectively, we suggest you create performance targets that identify measurable behaviors (for example, engage in two client conversations in which you ask how your firm can improve its service to the client) as well as numeric, measurable goals and objectives (for example, production statistics)—both independent and interdependent. The following table provides an overview of the steps you can take to determine the structure for a performance-based compensation system.
| Core Values | Competencies | Performance Targets |
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Each of these is discussed more completely in the sections that follow.
Why Measure Adherence to Core Values?
As firms face the challenges of an increasingly diverse workforce and constant change, it becomes more important for them to spell out their core values. This tells employees how they can expect to be treated, but it also tells them how the firm expects them to treat others. It tells them what they can count on, what the firm remains committed to over the long run. Well-defined and described core values let everyone know the price of admission. If you don’t evaluate people on how they live the firm’s core values, it can be easy for them to lose direction. By evaluating people against core value standards, you create awareness. Once individuals have awareness about how they are perceived by others to be living the core values, they can make choices about behavioral changes. When most, if not all, individuals in the firm engage in behaviors that adhere to the firm’s core values, the desired culture is created.
Why Measure Development of Competencies?
In their book, Competing for the Future, authors Gary Hamel and C.K. Prahalad distinguished between an organization’s core competencies and an individual’s workplace competencies. They said an organization’s core competencies “transcend any particular product or service, and indeed may transcend any single business unit within the organization.”6 In other words, some projects or services are so large (for example, an audit or specific consulting engagement) no individual can possess all the knowledge and skills needed to fulfill the project or service. Individual workplace competencies focus on employees and vary based on role in the firm (that is, they are specific to the position). For more than a century, accountants have been posting and balancing ledgers—requiring very specific and unique knowledge and skills (that is, competencies), most of which were learned on the job. In light of Frederick Taylor’s “scientific management,” Henry Ford’s assembly line, and highly segmented work in the armed forces as well as command-and-control hierarchies found in the work-force, competencies were not emphasized.
In the early 1960s, David C. McClelland, a former Harvard psychologist and founder of McBer, asserted that I.Q. and personality tests then in common use were poor predictors of competency. He believed companies should hire based on competencies rather than test scores. Thus, companies slowly began to measure competence.
To measure competence, you must first define it. Firms are more equipped to drive business results when they define competencies by position and then (1) measure whether employees within the positions maintain those competencies and (2) develop those who lack the competencies. A competency table is simply an organizational structure that outlines, for each position in the firm, a set of competency categories (for example, communicates effectively, thinks strategically, coaches and develops others, and so on) as well as the specific knowledge and skills that are necessary within each competency category. Exhibit 11–2, “Sample Excerpt of a Competency Table,” is a small excerpt from a competency table for a midsize firm. It illustrates that the ability to give presentations is an important competency within the “communicates effectively” competency category. Other specific competencies within the “communicates effectively” category might include the ability to write effective management reports, draft effective e-mail messages, or run an effective meeting. Exhibit 11–2 further illustrates that it is important for managers to be able to exhibit the specific behavior of preparing and assisting in the delivery of in-house and client presentations as well as the specific behavior of presenting proposals, budgets, and suggestions to principals and officers with regard to acceptance of prospective clients.
We suggest the use of competency tables for a variety of reasons, including the following:
▮ To help everyone understand position requirements
▮ To determine who should be interviewed for open positions
▮ To determine training needs based on lacking competencies
▮ To clarify why desired business results are not being met
▮ To understand what is necessary to move to the next level (that is, get promoted)
▮ To make more rational personnel decisions
▮ To increase overall competence in the workforce
▮ To create a healthier, more competitive firm
▮ To help stars stand out and prevent unqualified team members from hiding
Throughout this book we assert that employees who are not involved in the process of designing systems that will affect them generally lack commitment to the processes. We therefore strongly recommend you get employees involved in defining competencies. Why? Who is more knowledgeable about client needs and in the best position to satisfy those needs?
Both the AICPA and the Canadian Institute of Chartered Accountants (CICA) have developed skeleton competency tables. Exhibit 11–3, “AICPA Competencies,” and Exhibit 11–4, “Canadian Institute of Chartered Accountants Competencies,” may help you in developing your own competency tables.
Why Performance Targets?
According to Barry LaBov, CEO of LaBov & Beyond, a marketing communications firm, “People are people, and they want to be recognized. The programs that fail revolve around rewarding performance that doesn’t support company goals. Improving sales performance, for example, is not enough. Today you need programs that support such issues as profitability, loyalty and customer satisfaction. And you have to do it without alienating other people within the organization.” This supports our notion that the measurable objectives (that is, performance targets) must balance character and competence, leading and lagging measures, and independent and interdependent goals and objectives.
We actually agree with Alfie Kohn. “Rewards are a matter of doing things to employees. The alternative is working with employees, and that requires a better understanding of motivation and a transformation in how one looks at management.” This is why we often refer to mutually agreed-upon performance targets as a win-win agreement. In addition to the balancing act described in the previous paragraph, performance targets are created mutually so all stakeholders get something as close as possible to a perfect “win” for them.
PROVIDING FEEDBACK IN A PAY FOR PERFORMANCE COMPENSATION SYSTEM
As we observed in Chapter 10, in any performance management system individuals should receive sufficient feedback to know where their performance is strong and where they require improvement. Agreeing on the measures at the beginning of the year and then waiting a year later to see whether they were accomplished is woefully insufficient. Feedback should be provided at least quarterly.
However, it is not enough to let employees know regularly where they stand. They must believe in the metrics that are used as well as the tools that measure the metrics. As the old saying goes, “Garbage in; garbage out.” When employees do not trust the measurement tools, the data or information that goes into the tools, or the individuals who input the data, their cynicism increases. When cynicism increases, employees often throw up their hands in disgust and settle into a performance level that seems acceptable to them.
TRANSLATING PERFORMANCE INTO COMPENSATION
We have observed throughout this book that a firm must identify measures that guide everyday employee decision-making. Employees need to know what specific actions they can take to ensure that expectations are met or exceeded. Unfortunately, however, the link between superior performance and compensation remains weak. In addition to establishing the criteria on which performance will be rewarded, you must determine the mechanism for monetary rewards. The following are three common possibilities, each of which rewards both character and competence, both leading and lagging measures, and both independent and interdependent goals and objectives:
▮ Annual salary increase based on a cost-of-living or market increase plus living the firm’s core values, developing competency within themselves, and achieving a variety of objective measures.
▮ Annual salary increase (based on cost-of-living and/or market increase) plus annual bonus based on a combination of criteria, including living the firm’s core values, developing competency within themselves, and achieving a variety of objective measures.
▮ Annual salary increase (based on cost-of-living and/or market increase) plus multiple bonuses based on living the firm’s core values, developing competency within themselves, and achieving a variety of objective measures.
EFFECTS OF A PAY FOR PERFORMANCE COMPENSATION SYSTEM
The net effect of a good pay for performance compensation system should be the same for employees as it is for owners. You should expect the following benefits from a well-designed system:
▮ Compensation increases are based on overall contribution to the success of the firm rather than one or two measures of success.
▮ The system creates a results-driven, performance culture, rather than a culture of entitlement.
▮ Employees and owners know with clarity their:
—Job descriptions at each level
—Career progression opportunities within the firm
—Compensation upside
—Personal goals which they help to create
—Performance reviews
All of this leads to greater personal accountability, which in turn should lead to higher levels of productivity, efficiencies, and profitability.
FINAL THOUGHTS
When you try something new, you can almost be sure it will not be perfect the first time. The same is true for compensation programs. To come as close as possible to perfection, however, here are things you need to consider:
▮ What factors will be part of your new plan? Determine what factors you will measure and how you will measure them. The factors on which people will be measured should motivate them to behave in a manner that furthers the firm’s strategic initiatives.
▮ What weight will you assign for each factor? Depending on your strategic initiatives, the factors on which you measure should have different weights, and the weights can and should change from year to year based on changes in your strategic initiatives.
▮ What tool(s) will you use to measure each factor? You can use 360-degree surveys, productivity reports from the time and billing system, marketing reports, satisfaction surveys, and a wide variety of other tools to measure the factors.
▮ Does the compensation system recognize all types of contribution to the firm’s success? Firms need strong finders, minders, and grinders as well as leaders, mentors, coaches, and so on to be successful. Firms are a composite of the knowledge, skills, and personal attributes of their owners and employees. Fortunately, people are not clones of one another, and your compensation system needs to recognize the various contributions that drive the firm’s overall success. While it is true that not everyone is created equal, it is also true that your firm would not be where it is today without everyone contributing, in some fashion, to its success.
▮ Is it perceived to be fair? A system that is not perceived to be fair or fairly applied is doomed to cause problems. We suggest, therefore, that you seek feedback at least annually to determine existing beliefs about the compensation system’s fairness.
▮ Is it flexible to meet changing needs of the firm? Firms definitely change and you want to ensure the program is flexible enough to change along with the firm. We are not suggesting frequent changes in the compensation system, however. We suggest changes only to the degree they are absolutely necessary.
▮ Does it have significant differentials in compensation from owner to owner (or team member to team member)? Small variances in total compensation (that is, salary + bonus) between people in the same role (especially senior roles) are not healthy. As we said, owners and employees are not clones, nor do they contribute equally. The longer your system is in place, the greater the gap in compensation between the highest performer and the lowest performer in each level at the firm.
EXHIBIT 11–1 The Character and Competence Matrix
EXHIBIT 11–2 Sample Excerpt of a Competency Table
EXHIBIT 11–3 AICPA Competencies
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▮ Interpersonal skills and awareness ▮ Networking and dynamics ▮ Motivation and leadership ▮ Organizational ▮ Communication ▮ Quantitative ▮ Critical thinking ▮ Abstract and adapt ▮ Learning and training ▮ Information technology ▮ Global and external awareness ▮ Ethical/legal environment of management ▮ Technical |
EXHIBIT 11–4 Canadian Institute of Chartered Accountants Competencies
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▮ The pervasive qualities and skills, which include: —Ethical behavior and professionalism —Personal attributes such as accountability; adaptability to change; and the ability to self-manage, take initiative, and add value —Professional skills such as communication, problem solving, and management skills ▮ The specific competencies (grouped into six categories): —Organizational effectiveness, control, and risk management —Finance —Taxation —Assurance —Performance measurement —Information and information technology |