This post comes to us from Matteo Tonello, Director of Corporate Governance for The Conference Board, Inc., and is based on a paper by Mr. Tonello titled Sustainability in the Boardroom, which is available here.
In a recent paper, Sustainability in the Boardroom, published as part of the Conference Board’s Director Notes series, I discuss the findings from a survey of board practices in the area of sustainability by 50 public companies of different industries and revenue groups.
The survey revealed flaws in how corporate boards oversee their companies’ social and environmental initiatives. In particular, what appears to be largely missing is access to independent sources of information on the impact of business operations on the environment as well as detailed procedures and metrics for integrating social objectives into daily corporate activities. Directors mostly rely on reports by senior executives (89.2 percent of respondents) and almost never use additional sources (including peer-company benchmarks, environmental reports, director education programs, and consultants) that would help them critically verify and analyze any internally produced information on these matters. For most companies, sustainability discussions with the board only take place in reaction to emergency situations like the oil spill in the Gulf.
