Conference Board: US boards lag on integrating sustainability into oversight - "independent sources of information missing"
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Author: Marcy Murninghan - Principal, Transition Group [USA]
Despite rapidly changing financial regulations, the emergence of coherent global standards for disclosure, and a record breaking year for sustainability shareholder resolutions, most American firms fall short [on integrating sustainability into their boards' role as overseers]. According to a new report by The Conference Board, most public companies fail to embed a sustainability framework into board oversight... Author Matteo Tonello, director of corporate governance research, says, “In particular, what appears to be largely missing is access to independent sources of information as well as the detailed procedures and metrics for effectively integrating social objectives into daily business activities.”... Tonello summarized the study by observing that “Directors mostly rely on reports by senior executives...and almost never use additional sources... For most companies, sustainability discussions with the board only take place in reaction to emergency situations like the oil spill in the Gulf.”
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Author: Matteo Tonello - Director, Corporate governance research, Conference Board [USA]
Research by The Conference Board shows that, despite formal assignment of responsibilities to top business leaders, many companies still lack the structural framework to enable proper director oversight of corporate sustainability. The report illustrates the research findings on the following trends:
• The motivational drivers of board oversight of sustainability initiatives
• Board structure issues, including the allocation of resources and the assignment of responsibility for sustainability initiatives
• The use of widely recognized standards to define and plan sustainability initiatives
• Sustainability performance measures and reporting issues, and
• Corporate response to shareholder activism in this area.