The board of directors is responsible for overseeing key elements of the business strategy and process that keep things running - this should include any and all relevant sustainability issues. The board is also responsible for making sure that the day-to-day management of the business is aligned with long-term value creation. In order for boards to do this better, there should stronger integration of environmental, social and governance (ESG) impacts and dependencies within the overall governance structure.
The increasing prevalence and severity of ESG issues is putting pressure on companies and is making board decisions even more complicated. To stay ahead, boards should adapt their business models and strategies to improve their companies’ resilience over the long-term. Sustainability is very rarely integrated into governance and internal control processes. This can lead to sub-par disclosure around governance and gaps in reporting on a company’s long-term value creation.
Governance is evolving fast and investors are demanding more. In an effort to keep up with the changing risk landscape, boards must consider the potential impact of ESG-related risks on the long-term sustainability of their business. Now is the time to act. Sustainability can no longer be considered in isolation, it should be integrated into board governance and internal decision-making, so that investors can make more informed capital allocation decisions.
We are working with companies and partners across the world to integrate sustainability considerations into corporate governance strategies. We’re collaborating with key stakeholders to ensure that the solutions presented are useful and effective for board directors in key jurisdictions. This project will help board directors improve their decision-making processes to protect and preserve long-term value.
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