To bring this role to life, companies may need to appoint new board members with sustainability ex- pertise, use an external sustainability advisory group, and explicitly integrate sustainability into board du- ties. Unilever top management, for example, has spent a lot of time discussing with the board and board committees both the Unilever Sustainable Living Plan and the sustainable business model that would deliver on the plan. Unilever has an external sustainability advisory committee that meets with the board three or four times in a year; these meet- ings are useful settings to explain what the company is doing and to allow the board to ask questions, so it can also manage and support the company. While the Unilever board is now certainly behind the Unilever Sustainable Living Plan, several board members initially had to be educated on what seemed like a radical plan. They were unsure about the plan targets and about how the company might be af- fected and held accountable for its performance in this area. Now, board members understand that the Unilever Sustainable Living Plan is a living docu- ment. What may not have been very relevant five years ago is clearly relevant today — such as the ad- dition of a social-compliance component to the plan, which is something the board had to ratify. Board members also realize that transparency is not adversely exposing the company as much as some of the older board members had initially thought but is actually strengthening the core of the company by building trust. Companies may need to appoint new board members with sustainability expertise, use an external sustainability advisory group, and explicitly integrate sustainability into board duties.
SLOANREVIEW.MIT.EDU WINTER 2017 MIT SLOAN MANAGEMENT REVIEW 75 A good example of the board’s support of the company’s vision was when Unilever decided to aban- don quarterly reporting. That’s not a decision a board takes lightly, nor is that a decision the CEO makes alone. Some board members disagreed and pushed back, which prompted the company to come up with a stronger plan. But the board saw the logic and went along. Increasingly, the Unilever board sees the com- pany’s sustainability plan as a good way to ensure the long-term viability of the company and build share- holder value over the long term. Managing board expectations about what the company is going to deliver is key to building a sustainable business. In other instances, a more direct link to the top and bottom lines may make a more convincing nar- rative. At IBM Corp., a case was made to the board that developing more efficient processes involving scarce earth metals used in IBM products would allow the company to use less and waste less of such metals. That would both align with sustainability objectives and give the company a greater profit mar- gin. With less reliance on scarce resources, a company can have greater flexibility than a competitor.
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