These negative externalities and their consequences impose increasing burdens and risks on people around the world, damaging the environment and threatening our future prospects.
By Prof Colin Coulson-Thomas
Economic growth and increasing demand can flatter some boards. My own engagement with boards in over 40 countries suggests many of them are not effective.
Boards often destroy value, miss opportunities and limit prospects. They frustrate ambitions, inhibit innovation and stifle enterprise. They are overly cautious, risk averse, negative and defensive.
Many boards are narrow, lacking in diversity and short-term oriented. They are sometimes self-interested and unimaginative. They are often uninspiring for younger generations worried about their futures.
Some boards even see Russia’s illegal, unjustified and brutal invasion of Ukraine and its tragic consequences as an opportunity to take advantage rather than to uphold principles and confront aggression.
Investigations I have led over the years suggest that because of the strategies and priorities of their boards, many companies are a pale shadow of what they could be. Their organisations are bureaucratic, unresponsive, and inflexible. They are neither agile nor resilient.
The operation and activities of many companies are not sustainable. They should be scaled back and discontinued rather than accelerated or grown. They are damaging the environment, reducing biodiversity, burning up scarce natural capital and contributing to global warming and climate change.
These negative externalities and their consequences impose increasing burdens and risks on people around the world, damaging the environment and threatening our future prospects.
There is little time in which to change direction before tipping points are reached. The pre-COP 27 UN Environment Programme gap report suggests that Governments are not doing enough for us to achieve net-zero by 2050.
Corporate boards often have much greater freedom to act than public bodies. Some boards are endeavouring to be responsible in relation to their companies, their stakeholders, the environment and the communities and societies in which they operate.
Responsible boards think longer-term, and are leaders rather than laggards. They are decarbonising and aiming for net-zero before rather than after 2050.They are not hiding behind prison bars that only exist in their own imaginations. They are positive, courageous, diverse, and open to possibilities.
Effective boards see climate adaptation and mitigation and the need for more resilient infrastructures and more sustainable lifestyles as an unprecedented business opportunity. They encourage thinking, questioning, creativity and innovation. They inspire people and support enterprise, entrepreneurship and collaborative responses to common challenges and existential threats.
Effective boards also review and reset purpose and priorities, goals and objectives and strategies for achieving them. They embrace new models of business, sustainable technologies and more flexible and responsive forms of organisation. They initiate transition and transformation journeys to more sustainable operations and lifestyles
There is much for us to do and discuss over the course of the 2022 London Global Convention on Corporate Governance and Sustainability. We cannot leave it to Governments or to others. I think increasingly many laggard boards know what has to be done. They need the courage to initiate conversations, exercise leadership and act.
