How to write a governance strategy for ESG

Governance ESG

Are you struggling with how to write a governance strategy for ESG? Maybe you want to put ESG issues front and center of the way you run your start-up. Or maybe your boss has asked you to come up with something for your company. If so, this post is for you.

Governance in ESG
Governance ESG

To begin, good governance is the most established set of issues in ESG. Business schools and regulators know all too well that unmanaged governance risks can have serious implications for a companies’ profits and investors’ returns. Over the years, high profile corporate scandals have forced regulators to introduce corporate governance laws, codes and best practices. Importantly, these norms protect societies from multimillion dollar losses and criminal wrongdoing.

What is more, a sound corporate ethical policy can also enhance a company’s reputation with its stakeholders. Good corporate ethics can improve a company’s impact on important governance problems. In particular, the United Nations promotes ethical business principles that encourage companies to be a part of the solution and not the problem when it comes to global governance challenges such as tax evasion, corruption and conflict.

How to write a governance strategy: where to start

When you embark on developing your governance strategy, you will need to think about two pillars.

First, there is a “hard” skills side of legal, accounting and audit requirements that are codified in your jurisdiction with which you will need to comply (or sometimes, explain why not). Sometimes people also include cyber security issues here too. You will need to talk to professionals with “hard” skills and knowledge in all these areas.

 

In addition, you can take inspiration from the SASB material risk maps. You can search common corporate governance risks by economic sector. The advantage of this exercise is to think about whether your corporate governance is positioning you to adequately manage these risks, and how you might need to amend your corporate governance to more effectively mitigate material risks to your enterprise.

Second, there is a “soft” side, which is about your company’s ethics and reputation. You have more creative space here to define what matters to you and your stakeholders for the long-term. This is also an opportunity to “future proof” your corporate governance for emerging global corporate governance standards as your business grows.

 

If you need inspiration on the soft side, a good place to start is the UN Global Compact, the G20/OECD Principles of Corporate Governance, and the Global Reporting Initiative. These frameworks suggest some important principles and standards for corporate governance systems and reporting governance and ethical impact.

 

Common corporate governance issues include financial integrity and audit, privacy, cybersecurity, diversity and equal pay, culture and integrity, anti-corruption, lobbying and campaign contributions, accountability and transparency, paying a fair share of taxes, and board composition, alignment of stakeholder interests and personal conduct, integrity and accountability of corporate officers.

In order to help busy corporate employees, we spoke with the Tigerhall social learning platform about where and how to start with a strategy for governance in ESG. If you would like to learn more, click on the link to the Tigerhall podcast with ESG Hive’s Sarah Hearn. The conversation is quick and informal and takes you through where and how to write a governance strategy for ESG.

How to write a governance strategy for ESG
Check out Tigerhall’s Social Learning Platform to learn more

If you found this blog helpful, why not also get a bird’s-eye view of ESG with our ESG for Beginners or learn more about corporate ESG disclosure standards. You can also leave a comment below with your questions and thoughts, we love to hear from our readers! We are an educational community for all people interested in ESG.

 

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