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Increasingly, investors want to know how boards and committees are addressing ESG topics.

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How should boards oversee ESG topics? Boards can decide whether they can best address ESG elements as standalone agenda topics – or incorporate those elements into regular agenda topics. Example: Board oversight of ESG elements in the company’s supply chain can be more effective if it incorporates ESG into supply chain reporting and planning – human rights protections at the company’s suppliers, worker and product safety, sustainable sourcing, environmentally-responsible manufacturing (e.g., water, energy, waste). This integrated approach makes for more holistic board oversight and holds business leaders, not some corporate staff person, responsible for ESG outcomes.

How should boards communicate thier approach to investors? Often, companies talk with investors about the fact that the board or a committees discusses a particular ESG issue “x” times per year and which executives join those discussions. In-depth disclosure on the company’s website and in the proxy statement of the board’s approach to ESG helps all investors gain an understanding of the board’s role in oversight of ESG issues and take some comfort that the board is addressing ESG issues in a proactive, holistic manner.

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