Board Questions to Ask About the Effectiveness of the Capital Allocation Process

In brief: Driven by a greater focus of institutional investors and activist hedge funds on underperforming companies and their use of cash, boards are increasingly engaged with ensuring the capital allocation process is robust and clearly aligned with the corporate strategy. This guidance document from KPMG helps directors evaluate the effectiveness of the capital allocation process.

This resource can help your board:

• Assess the effectiveness of the capital allocation process
• Ensure alignment between capital allocation and long-term strategy
• Inform discussions about reinvesting cash or returning it to shareholders

Most relevant audiences: board chair or lead director, audit committee chair, senior management