Summary
In today’s rapidly changing world it is clear that many corporate boards struggle with ESG (Environmental, Social and Governance) for two key reasons.
- A vicious circle of skills shortages: directors generally lack sustainability expertise and people with sustainability expertise generally lack board-ready credentials. Until these two groups come together and learn from each other, the knowledge gap will only get wider.
- A paralysis trap of speed and complexity: the combination of rapid change and huge variety of ESG challenges demands contrasting skills – intuitive, quick thinking versus disciplined logic and deep understanding. These competing demands often lead to inaction.
Both of these problems can be solved by improvements in board structures and complementary practices.
The INSEAD Corporate Governance Centre has developed a new report study to help corporate boards assess and improve their structures and practices for addressing sustainability / ESG. Based on qualitative and quantitative research, it introduces six different ESG governance models and six complementary practices that are commonly in use – and provides practical recommendations on how to use them.
Board structures: six possible models
