Board Adoption and Oversight of Sustainability

To participate in the UN Global Compact, your organization must demonstrate the support of your Board of Directors, in addition to the chief executive officer’s commitment. We require this because leadership must send a strong signal throughout the organization that sustainability counts.

More and more, Boards are recognizing that sustainability is not just good business sense, but also increasingly their fiduciary duty. The Board’s involvement can significantly advance the company’s sustainability efforts, ultimately supporting the company’s long-term profitability and viability.

Board responsibilities

  1. Set the strategic course and ambition. Boards of Directors offer long-term perspective and symbolic value that can encourage your company to make sustainability part of your everyday business practices.
  2. Shape the corporate culture. Boards’ decisions establish what is important to your organization. They can encourage your company to reward sustainability performance with status and career progression.
  3. Monitor, audit and report. The Board can ensure that your company links sustainability metrics and policies to business performance. They can integrate them into existing processes across the value chain, risk management and compliance efforts.
  4. Direct future plans. Boards can incorporate sustainability priorities into CEO succession planning, recruitment and the remuneration of executives.
  5. Promote stakeholder dialogue. Board members can strengthen partnerships and alliances with stakeholder groups. They can facilitate in-person dialogue, stakeholder representation on the Board and formal advisory panels.

An empowered board

As you begin to address sustainability, you may want to establish a special committee dedicated to sustainability. However, the entire Board must make or approve all key decisions. Further, the Board should integrate sustainability into the duties of all of its other committees (e.g., the audit, governance, nomination and compensation committees).

Board diversity

To provide wise counsel and meaningfully monitor management’s actions, the Board must be composed of Directors who understand how sustainability issues affect the company. A Board should require gender balance and diversity of skills, cultures, ethnicity, age and viewpoints. This ensures an open exchange of ideas with multiple perspectives.

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