We need to talk about the 'G' in ESG

| February 21, 2022

With stakeholder interest spiking, “governance” pages need to cover a lot more than committees and processes. These five companies are defining a new approach, says Jonathan Holt

“Corporate governance” has long been one of the most yawn-inducing phrases in corporate communication, but that is changing fast.

Recent corporate scandals and controversies have revealed governance to be a high-stakes topic, and the rise of environmental, social and governance (ESG) reporting is expanding the definition of “governance” to include some of the most interesting and challenging aspects of how companies are run.

Last year, the International Organization for Standardization (ISO) introduced a new “Governance of organizations” certification which codifies into detailed guidance the idea that governance includes things like the company’s purpose, strategy, ethics and social responsibility as well as more traditional concerns such as governance documentation and risk management.

Traditionally, governance sections were written by lawyers and investor relations experts with a narrow audience in mind – regulators. The whole point was to be reassuringly bland. But the new frameworks and expectations call for a treatment that is lighter, broader and more engaging.

On the corporate web specifically, it could be a while yet before definitive new conventions take shape, but there is plenty of scope for experimentation and innovation right now. What we can say is that traditional corporate governance and ESG governance are converging; that the focus is shifting away from the ‘Investors’ section and more towards ‘Sustainability’ and ‘About’; that clarity and transparency are more important than ever; and that the best provisions focus on actions and strategies first and processes and documents second.

Here are five examples of companies forging a more expansive and transparent approach:

Walmart: Embracing the full spectrum of ESG governance

Walmart devotes an entire section of its online sustainability report to ESG governance, with ‘Corporate governance’ positioned alongside ethics, public policy, digital citizenship and human rights, among other topics.

The ‘Corporate governance’ page emphasises big themes such as accountability, transparency and responsible growth – with graphics and tables that explain the board’s composition (in terms of diversity and experience), stakeholder engagement and ‘Challenges’ in ways that will be interesting to and easily understood by general and specialist readers alike.

General Motors: Timely data and pull quotes

GM’s ‘ESG Governance’ section includes a corporate governance overview plus five hot button topics: Public Policy, Ethics, Human Rights, Cybersecurity and Environmental Governance. A neat ‘Board Composition & Engagement’ panel shows board diversity and key stats (number of meetings held etc) from the latest reporting year, and there are pulled quotes and other graphic effects to give each page in the section good readability.

The ‘Ethics’ page is data rich and accessibly presented. This is the furthest things from a dry or stale ‘corporate governance’ section.

Maersk: Targets, progress and actions taken

Maersk’s ‘Governance’ sub-section leads with a set of high-level targets and covers ‘Business ethics’, ‘Responsible tax’ and ‘Data ethics’, among other topics. This information is housed in the ‘Sustainability at Maersk’ section and each page offers succinct, graphical progress updates from the latest reporting year, with onward links to the sustainability report, rather than the annual report, for more detail.

Capgemini: Framing governance in terms of ESG priorities

Capgemini discusses governance within an ‘ESG’ section on the Investors website and frames the discussion in terms of priorities and progress updates linked to the UN SDGs. An engaging embedded webcast video features senior leaders talking about the company’s governance priorities and plan for sustainable growth.

There are also light but meaningful ‘Corporate governance’ and ‘Board of Directors and Board Committees’ pages in ‘About us’ on the main website, which have neat graphics presenting timely facts about the board, such as gender balance, committee attendance rates and average age.

BASF: Transparent remuneration information

BASF also houses ‘Corporate Governance’ in ‘Investors’, but the provision is notable in that it is so broad – covering ethics and board diversity as well as the more traditional aspects of an investor-led treatment of the topic.

Senior leader remuneration is covered via prominent signposts to information held in the online annual report, including detailed HTML tables for executive compensation, not just that of board members – a level of transparency which is a rarity on the corporate web right now and should not be.

There are also brief discussions of governance in the ‘Organization’ and ‘Sustainability’ areas of ‘Who we are’ on the main site, appropriately.

Jonathan Holt is Senior Consultant and Head of Strategic Projects at Bowen Craggs

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