Getting on the Board Agenda
Boards are beginning to understand that to ensure long-term competitiveness it is necessary to understand the sustainability challenges before them, to set corporate sustainability policy and be accountable for its implementation. However, according to Ceres' assessment in Gaining Ground: Corporate Progress on the Ceres Roadmap for Sustainability, only one-third of the 600+ largest U.S. companies' boards of directors oversee sustainability matters.
Leading companies are recruiting a diverse roster of board members, drawing upon their unique perspectives shaped by personal attributes (such as gender, race, geography) and professional experience, notably including sustainability expertise. A diversity of backgrounds and experiences ensures that a wide-range of viewpoints can be offered regarding business risks and opportunities, which, for a company operating in the 21st century, includes environmental and social issues. Ceres Network Company, Prudential Financial, for example, added sustainability and corporate responsibility skills as one of its criteria for board member selection. Doing so not only illustrates the company’s commitment to sustainability at the highest levels, but also enables the board to provide meaningful oversight for emerging environmental and social issues that confront the business.
Board oversight can take several forms. Some companies establish stand-alone committees, such as Ford Motor Company’s Sustainability Committee, while others assign functional responsibility to an existing committee, such as EMC’s Corporate Governance and Nominating Committee. The type of committee is less important than the scope and ambition of its mandate, which should include company-wide oversight on issues such as climate change, human rights, sustainable supply chain management, health and safety, as well as sustainable products and services. For example, Nike provides board members with regular training and education on key sustainability issues. This education promotes a more strategic, long-term approach to the board’s overall assessment of the company’s business performance.
To read more about guidelines and best practices that Ceres companies and others are implementing, click here.