Armed with business unit specifics and challenges the sustainability board then

Armed with business unit specifics and challenges the

This preview shows page 16 - 18 out of 34 pages.

Armed with business-unit specifics and challenges, the sustainability board then returned to the board of directors and presented their findings. It got a green light to conduct deep dives into core busi- nesses and create a “sustainable solutions approach” (the accelerators program) that would encompass every product line in the company. 18 Getting the Board On Board Boards have yet to engage sustainability efforts, even though sustainability has become a top management agenda item. This is a real leadership problem according to Integrated Governance: A New Model of Governance for Sustainability, a comprehensive 2014 report on sustainability and governance by the United Nations Environmental Programme Finance Initiative (UNEP FI) 19 : As companies increasingly recognize the need to develop a sustainable strategy, where sustainabil- ity issues are integrated into the core of the business model, a respective need is created for a governance model that is able to supervise the formulation and execution of such a strategy. FIGURE 11: BOARD SUPPORT IS LINKED TO COLLABORATION SUCCESS Companies with supportive boards are more likely to rate their collaborations as successful. In general, how successful are the sustainability collaborations your organization is engaged in? Does the board actively support your organization’s sustainability related collaborations? Yes No Very Quite Somewhat Slightly 21% 46% 25% 5% 6% 26% 42% 26% Figures don't add up to 100% due to rounding and exclusion of those who responded “not at all” or “don’t know”
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JOINING FORCES MIT SLOAN MANAGEMENT REVIEW 15 LACK OF BOARD ENGAGEMENT Our survey results show that only 22% of manag- ers perceive that their boards provide substantial oversight on sustainability issues — and our study is not the only research to find tepid board support for sustainability. The Integrated Governance report analyzed 2011 Bloomberg corporate data on 60,000 businesses, and found that less than 2% of companies that report en- vironmental, social and governance information had an executive or non-executive director with re- sponsibility for sustainability. 20 Only 374 companies had a sustainability committee that reported directly to the board, and none of them had members who were actually on the board. 21 A different research review indicated that no more than 10% of U.S. pub- lic company boards have a committee dedicated solely to corporate responsibility. 22 The Integrated Governance report states that such “low numbers suggest that most companies still have not taken responsibility for sustainability issues at the highest governing body of the corporation.” 23 Paul Polman, CEO of Unilever, put the issue even more succinctly: “Boards are a latent resource.” BARRIERS TO BOARD ENGAGEMENT Based on our survey and interviews, the strongest barriers to greater board engagement seem to be: unclear financial impact, a lack of sustainability ex- pertise among board members, other priorities, short-termism and the view that boards should focus on shareholder value.
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