The Global Compact Board Program is the first of its kind to support Boards of Directors to effectively oversee and help drive their company’s sustainability strategy, with a view to protect and support financial value creation. Board adoption and oversight of corporate sustainability, while on the rise in some respects, continues to represent an area of tremendous opportunity for most companies. By embedding sustainability within its core duties – notably setting the strategic course, managing and monitoring risk, leading executive recruitment, and determining remuneration – directors are uniquely positioned to ensure the full mainstreaming of sustainability into business strategy and practices in a way that will support the long-term profitability and viability of the company.
Building on the resources and tools developed for the new Global Compact Board Programme, the UN Global CompactLEAD program held an interactive webinar series carried out in three parts, featuring conversations with world class experts on why corporate sustainability is a Board-level concern and what role Boards should play.
Board Adoption and Oversight of Corporate Sustainability Webinar Series Brief Summary: board adoption and oversight of corporate sustainability
Part I: Sustainability belongs on the agenda of Boards of Directors
Part I of the webinar series took place on 14 May 2015, and started with a great discussion on Why Sustainability Belongs on the Agenda of the Board, featuring Georg Kell, Executive Director of Global Compact; Robert G. Eccles, Professor at Harvard Business School; and Erika Karp, CEO & Founder of Cornerstone Capital. The speakers made a strong pitch for increased Board involvement on sustainability by arguing that:
- As the strategic imperative and material impact of sustainability is increasingly recognized, getting Boards tuned in to sustainability does not just good business sense but also increasingly is becoming their fiduciary duty to effectively manage risks and opportunities related to sustainability.
- Legal liability and risks are evolving in the legislative environment; duties are emerging across much geography. There are substantial risks and the potential for liability for sustainability-related action or inaction have rapidly increased.
- Investors and other stakeholders are looking to the Board’s ownership of sustainability as an indication that risks and opportunities are adequately dealt with at the highest level, and thus a proxy for good governance overall.
Through its core duties, long term perspective and symbolic value, Directors are uniquely positioned to ensure the full mainstreaming of sustainability in a way that supports the long-term profitability and viability of the company; and
Part II: The Role of the Board on Sustainability
Part II of the webinar series took place 28 May 2015. Titled The Role of Boards on Sustainability, the webinar provided insights and concrete examples of important roles and responsibilities of a Board equipped to oversee and drive sustainability; how these roles complement the ones of executive leadership; and the current gaps and challenges related to the increasing expectations.
Speakers for this webinar included Martin Reeves, Senior Partner of the Boston Consulting Group; Dianne Dillon-Ridgley, a Former Board Director of Interface, Inc.; and John Elkington, Co-Founder & Executive Chairman of Volans. The speakers elaborated on how sustainability is increasingly dealt with at the Board level and how Board members can play an important role by fully integrating sustainability into all core duties. Through core duties related to setting strategic course, audit and monitoring, CEO recruitment and remuneration; their long-term perspective and strong symbolic value – Boards are uniquely positioned to ensure the full mainstreaming of sustainability into business strategy and practices. The board’s role is currently evolving to include:
- Evaluating the long term impact of sustainability, defining sustainability goals and policies, and integrating sustainability into business strategy.
- Shaping corporate culture to integrate sustainability into all core duties by setting the tone from the top to establish and promote a culture of integrity and sustainability. board adoption and oversight of corporate sustainability
- Determining and monitoring policies, ethics/codes of conduct, risk management and sustainability metrics against performance, and establishing a level of transparency and external disclosure.
- Integrating long-term and ESG issues into executive pay; incorporating sustainability criteria into CEO succession planning, executive recruitment, and directors’ election process.
- Undertaking active dialogue with diverse stakeholder groups and protecting the interest of all key stakeholders.
Part III: Organising for Sustainability – Board structure and composition for sustainability board adoption and oversight of corporate sustainability
Part III of the webinar series took place 9 June 2015 and was the third and final part of the series. The 9 June webinar provided companies with engaging insights on how to best organize for sustainability at the Board level.
Aron Cramer, President & CEO of Business for Social Responsibility (BSR); Karina Litvack, Independent Board Director of Eni; Rita M. Rodriquez, Board Member of PVH Corporation; Craig Smith, Professor and Chair in Ethics and Social Responsibility at INSEAD, joined the discussions on Board structures with a specific focus on the pros and cons of Board level sustainability committees, as well as on skills and diversity benefiting the advancement towards full integration of sustainability. The speakers highlighted the growing need for the Boards to incorporate the following points:
- The culture of doing the right thing should be seen as a core for shareholder engagement board adoption and oversight of corporate sustainability
- The Board has an obligation to help drive strategic approach to sustainability. Sustainability practices can affect the long-term return. Incentivizing CSR (sustainability) board can make a difference.
- Integration of sustainability needs to grow organically – companies need to put sustainability into everything that they do.
- By and large, most board members are not experts in sustainability. Members with a strong sustainability perspective should be brought into the board to provide insight and strategic guidance.
Want to learn more about the Global Compact Board Programme? Here are some useful resources to get you started:
- Board Programme Brochure
- Introductory Video (“Unlocking the Value of Corporate Sustainability”)
- A New Agenda for Boards of Directors
- Press release from Global Compact Board Programme launch (20 November 2014, New York) board adoption and oversight of corporate sustainability
Building on the resources and tools developed for the new Global Compact Board Programme, the Global Compact Network Canada (GCNC) is proposing to launch a new Canadian Working Group. Below you will find more information pertaining to the new GCNC working group:
“How best to engage the C-suite and the Board of Directors”
In March 2015, the Global Compact Network Canada (GCNC) facilitated a panel discussion among the Global Chairman of Unilever, Michael Treschow; the Chair of CSR Committee at PVH Corp. Rita M. Rodriguez; and the Managing Director at BlackRock, Chad Spitler, discussing Long-term thinking in the Board room. As the Head of Global Compact Network Canada, Helle Bank Jorgensen chaired the panel discussion.
Throughout our Canadian network, we have noticed a growing interest in seeking guidance on how to bring the issue of corporate responsibility and responsible value creation to the attention of the C-suite and Board of Directors. As a result we are forming a working group on how best to engage the C-suite and the Board of Directors.
The aim of this working group would be to provide a platform for participants to:
- Discuss the challenges with regards to communications with/to the C-suite and Board members
- Gather suggestions on how best to engage the C-suite and BoD
- Communicate how your work is creating value for the business operations and is aligned with the company’s strategy
Helle Bank Jorgensen is also a Global facilitator for the Global Compact Board Programme of UN Global Compact (UNGC), and has authored the following five articles discussing how to align the interests of Board on corporate sustainability:
- Blackrock, Unilever, PVH on sustainability from investors to boards of directors
- What makes a board fit for the future?
- How boards of directors can shape a sustainable future
- CORPORATE SUSTAINABILITY – FROM BLIND SPOTS TO BRIGHT SPOTS
- 5 ways boards of directors can support sustainability
These articles can be used as inspiration, but we believe that the Canadian Network can bring a lot of good insight to the debate and assist each other and your companies in providing sustainable value. board adoption and oversight of corporate sustainability
Please let us know if you are interested in joining this new Canadian working group (open for Global Compact Network Canada Participants). For more information, please contact program manager Aparna Venkatachalam atAparna@globalcompact.ca