ESG Board Committees, Part I: Five Considerations Before Adopting an ESG Board Committee

Summary

This article outlines five steps that companies should take before creating an Environmental, Social, and Governance (ESG) board committee. With the world of ESG expanding on a daily basis, questions arise around how companies should structure their board's governance over the environmental and social matters included in their company's definition of ESG. The short answer here is that, as is the case with traditional areas of corporate governance, there is no one-size-fits-all approach. For some companies the right answer will exist in better defining the scope of the responsibilities of their existing board bodies; for others, the right answer will exist in creating a new board body. Which approach is the right approach will depend on the board, its current composition, and the ESG strategy that the company is pursuing. Either way, there are a number of steps that every company should take before creating an ESG board committee (or assigning ESG duties to existing board bodies), which ...