Sustainability and Corporate Governance

Corporate governance is the system and structures of rules, practices and processes by which a company is directed and controlled, the goals and objectives of the company are established and the performance of the company is tracked.  Traditionally, corporate governance has focused on the owners of the corporation that have supplied the financial capital necessary for the business to operate (i.e., the shareholders), regulation of the duties and responsibilities of the persons that the owners have selected as their agent to deploy their financial capital and generate a reasonable return on their investment (i.e., the directors and the members of the executive team); the control environment, which includes accounting procedures, internal controls and external audits used to track the operational activities of the company selected by the directors as the best means for delivering the anticipated return on investment to the shareholders; and transparency and disclosure, which are needed in order for the shareholders to fully understand how their financial capital has been used and to ensure that their agents, the directors and members of the executive team, have not abused their positions.  However, as time has gone by, corporate governance has emerged from what often seemed to be an esoteric collection of laws, regulations and contracts to recognition of its role as a primary driver of competitive advantage and profitability and a means for making and executing strategic decisions and ensuring that companies achieve their goals.  The new bottom line for directors is that sustainability is being recognized more and more as a strategic business question and they now need to acknowledge that sustainability is part of their corporate responsibility of guiding and overseeing corporate activities.  Identifying, acknowledging and addressing corporate sustainability issues creates new and significant challenges for directors and the management team that range from setting high-level goals and adopting strategies to achieve those goals to extensive changes in day-to-day operational activities.  Directors must not only ensure that their companies are conducting full assessments of the entire life cycle of their products and services but must also provide the resources and incentives to collect, analyze and report information relating to the progress of the company’s corporate sustainability initiatives.  Institutional investors and other stakeholders will not be satisfied with vague promises and aspirational principles from their companies, nor will companies be able to simply continue to adopt a reactive approach to sustainability-related concerns (i.e., waiting until a shareholder proposal on a sustainability topic is imminent before engaging with the shareholder to resolve the concern).  In fact, directors should expect that stakeholders will demand that companies demonstrate a proactive approach to developing and implementing sustainability strategies, allocating capital to sustainability-related initiatives and effectively and transparently managing the risks associated with failure to respond to sustainability issues.

PROJECT PUBLICATIONS

Guides

Board Oversight of Sustainability

Corporate Governance and Sustainability

Formation and Organization of Benefit Corporations

Legal and Voluntary Sustainability Standards and Instruments

Handbooks

Sustainability and Corporate Governance: A Handbook for Sustainable Entrepreneurs

Research Papers

Corporate Governance and Sustainability

Additional Materials

Articles

Governance: A Library of Resources for Sustainable Entrepreneurs

KLUWER LAW INTERNATIONAL

Sustainability and Corporate Governance (Forthcoming Fall 2018)

MANAGEMENT TOOLS

Forms

Board Committee Charters

Governance Codes and Policies

Training Materials

Benefit Corporations

ADDITIONAL RESOURCES

Books

Guide to Establishing a Social Enterprise

Stakeholder Engagement and the Board

Sustainability Guide for Boards

The Public Benefit Corporation Guidebook

Chapters or Articles in Books

B-Corp Handbook (Sample Chapter)

Articles in Journals

An Introduction to Benefit Corporations

Benefit Corporations – A Challenge in Corporate Governance

Legal Innovation and Social Entrepreneurship Corporate Formats

Papers

Benefit Corporation Law

Benefit Corporation White Paper

Best Practices for Executive Directors and Boards of Nonprofits

Board Adoption and Oversight of Corporate Sustainability

Board Oversight of Environmental and Social Issues

Board Oversight of Sustainability Issues

Business (Enterprise) Models for Social Benefit Enterprises

Corporate Secretary’s Guide to Board Sustainability Governance

Deloitte 2016 Board Practices Report

ESG, Strategy and the Long View

Sustainability Mindset- How Board Organize CSR Oversight

White Paper – Need and Rationale for Benefit Corporations

Governmental and Other Public Domain Publications

Model Benefit Corporation Legislation (April 2017)

Online Articles

Understanding and Forming a California Benefit Corporation

California Benefit Corporations

Benefit Corporations in California

Websites

Cooley – Benefit Corporation

RELATED TOPICS

Sustainable Entrepreneurship

Sustainable Leadership

Sustainability and Organizational Culture

Sustainability Governance and Management

Ethical Management

Management Systems

Organizational Design and Sustainability

Strategic Planning for Sustainability

Sustainability and Corporate Governance

Corporate Social Responsibility

Stakeholder Engagement

Sustainability Reporting and Auditing

Sustainability for Small Businesses and Startups

Sustainability Standards and Instruments

Investor Relations

Environment, Health and Safety

Labor Practices and Working Conditions

Sustainable Human Resources Management

Product Responsibility and Customer Care

Sustainable Product Development

Sustainable Technology Management

Community Impact and Development

Human Rights

Procurement and Supplier Management

Compliance, Ethics and Risk Management

Societal Relations

Governmental Relations

Sustainable Finance