28 March 2019, Geneva Switzerland: Today, the World Business Council for Sustainable Development (WBCSD) released new research exploring the state of corporate governance across twelve countries. The research explores the board’s role in creating long-term value and pays special attention to how environmental and social risks and opportunities affect the corporate governance process.
Most importantly, the paper highlights the common misconception that companies exist only to maximize shareholder value. In reality, the paper states, directors are obligated to help their companies “survive and thrive” – with shareholder value as a key outcome rather than a principle motivator.
This point is particularly important because, as the world becomes increasingly interconnected, a twenty-four hour media cycle and increased transparency means companies can no longer act unsustainably without consequences from consumers, employees, regulators and the press.
The findings of the report highlight that those companies whose boards consider sustainability issues – from long-term value creation to gender diversity – are better equipped to do well in the era of sustainability risks and opportunities.
Mario Abela, Director of WBCSD’s Redefining Value Program, said, “Our intention with this report is to outline the corporate governance landscape, to reiterate the importance of strengthening governance and to help boards more fully address the spectrum of challenges they face. It’s the first step and we will now turn our efforts to helping companies to respond to those challenges.”
To address this, WBCSD is leading a new project that will build on existing work and literature, to develop training materials that will support companies to integrate sustainability-related topics into their overall governance practices.
To learn more, visit the WBCSD Governance and Internal Oversight project page.