A bonus linked to one visible growth number can encourage behaviour the board did not intend. Revenue, installed capacity and funds committed each describe only part of a business outcome. Management incentives should reflect the responsibilities of the role and the period over which its decisions create commercial consequences.
Choose measures with a clear operating link
The plan should identify the decisions the executive can influence and the result the business needs. A sales leader may influence orders while credit approval and collection sit elsewhere. Rewarding booked revenue alone can encourage business that is costly to serve or slow to pay. The measures should recognise the relevant interfaces without making accountability so broad that no individual can understand it. A hypothetical expansion manager might be assessed on accepted commissioning, budget discipline and supported operational handover, rather than equipment delivery alone.
Balance leading activity and delivered results
Some roles require work whose results emerge later. A project team may need to complete technical preparation before operating revenue is possible. Leading measures can recognise that work if they describe meaningful evidence. Meeting counts and documents uploaded are easier to inflate than accepted outputs. The plan should explain who validates completion and how quality is assessed. A balanced approach can support long-term work while preserving the distinction between preparation and performance. The committee should be able to see why each measure is relevant to the stage of the business.
Consider the downside created by success
An incentive can increase one metric while weakening another part of the company. Faster expansion may strain service quality, working capital or staff capacity. The design should identify material constraints and how they affect the award. OECD governance principles provide general context on board oversight of remuneration and conflicts. The precise arrangements require company-specific consideration. Commercially, the aim is to avoid paying for a result that looks attractive in isolation but leaves the enterprise with costs or exposures that management had an incentive to overlook.
Review the plan as responsibilities change
An executive moving from development to operation may need a different set of measures. The board should examine whether the existing plan still reflects the work and current business priorities. Changes should be documented and communicated before performance is assessed against them. Al Furqan's long-term enterprise narrative makes incentive design relevant without establishing any current compensation arrangement. The strongest plan gives management a clear account of what counts, who validates it and how the company will distinguish a sustainable contribution from a short-lived improvement that merely shifts the problem elsewhere. The review should examine whether reported performance can be reproduced from agreed records, reducing the chance that the award depends on a disputed calculation at year end.
