If you parse through the thousands of sustainability (non-financial reporting) online either direct from websites from major brands such as Coca-Cola, Nestle, or Nike, or even the mid-major companies that are trying to do the right thing, you will see something missing; and it is glaringly obvious once you start looking for it.
A common approach, which leaves room for problems to set in later, is that organizations largely focus on the environmental and social aspects of their environment
Investopedia describes corporate governance
“Everything that occurs under the corporate umbrella is done so according to governance. Without it, the company doesn’t run. Good governance is demonstrated by a balanced board of independent directors, who support whistleblowing policies in place for employees; while maintaining the mindfulness that
unless the governance strategy can cultivate the corporate culture, which has more power than any other aspect of the organization, it will die a painful death.”
The following diagram, taken from our Amazon best-selling book ‘Sustainable Project Management’ highlights that the three Measures of Prosperity, Environment, and People are ultimately driven by three Drivers—Risk Mitigation and Brand Protection, Productivity, and Growth.
However. While Executive Strategy, the lens that owns corporate governance, sits below Culture [see our post on culture eats strategy for breakfast] It owns that also. So what does all this mean?
It is widely respected that good governance functions like a bicycle tire with each spoke in the wheel representing a tenant of the hub’s construct to keep it from getting bent. The spokes can include:
- It follows the rule of law
- It is inclusive of everyone and everyone participates
- Enjoys consensus
- It has hooks in place for accountability
- It responds to needs
- It is efficient
It’seffectiveness is measures
This isn’t the end-all be-all list but you see the point of where I am going.
The policies and procedures that this list describes is what needs to be unearthed, dusted off, and given a permanent home in the sustainability report.
In our GPM 2018 Report, which can be found on the UN Global Compact’s website we have listed the policies and procedures that we have in place for governance and also what we hold our vendors and partners accountable for to ensure that what we produce is done so sustainably.
In our report for example, the following items have been included:
- Includes a CEO statement of continued support for the UN Global Compact and its ten principles
- Description of actions or relevant policies related to Human Rights
- Description of actions or relevant policies related to Labour
- Description of actions or relevant policies related to Environment
- Description of actions or relevant policies related to Anti-Corruption
- Includes a measurement of outcomes
All of these pull from corporate governance. As at the end of the day, you can’t manage what you don’t measure and you can measure what you don’t manage. Consumers are measuring your products against their competitors so the organization that includes the “how and why we do it this way” in their reporting will reap the rewards in the end.