Boards of directors can play a critical role in determining how much attention their firms pay to sustainability.
In this article, Craig Smith, INSEAD Chaired Professor of Ethics & Social Responsibility and Ron Soonieus, INSEAD Executive in Residence and Chairman of the Dutch NAA Sustainability Club explain how boards can turn their aspirations for sustainability into meaningful action, particularly in light of the fundamental questions boards should be asking in the wake of the COVID-19 pandemic.
From the authors:
“This article is our most elaborative on the subject to date. It includes a fresh take on our “Five Archetypes of Board Sustainability Behaviour”, new insights, recommendations, and our view on how COVID-19 changed nothing (and everything) for boards.”
First published by Management and Business Review. To read the full article click here.
Boards of directors are vital to firms taking substantive action on sustainability. While prior research has suggested that boards pay little attention to the topic, a recent survey by Board Agenda suggests that many individual board members have ambitious aspirations for sustainability. Unfortunately, respondents also feel that their companies lack the people, knowledge, and tools to take action. We interviewed twenty-five directors from the boards of well-known firms, examining the obstacles to greater board engagement with sustainability, including board members’ characteristics. In analyzing interview responses, we found five distinct archetypes of board member behavior. These profiles help explain the divergence between the attitudes of board members toward sustainability and the frequently inadequate action of the board as a whole. Our findings suggest ways to motivate each type of board member and the value of auditing the knowledge and mindset of board members toward sustainability, offering six approaches to strengthening board engagement with sustainability. While the economic effects of the COVID-19 pandemic might appear to reduce businesses’ ability to become more sustainable, we believe the wise course is to focus on the longer-term trend toward meaningful action. We are confident that many board members will agree.