Jan 262017

Yes, believe it or not, if you have a reasonably good appreciation of business, corporate governance and sustainability risk, you can offer valuable support to Boards of private companies, charities and others. How?

sunsetWell, you need to have a good appreciation of what Corporate Governance is! You may be familiar with GRI's Governance pages. Or you may be aware, and have used, the governance indicators from the SGI. Alternatively you may know about sustainability as a set of "ESG" issues - environmental, social and governance. This is the language of the financial and investment community and is commonly used on listing rules in stock exchanges.

But I found that the How to become a Non-Executive Director course run by David Doughty at Excellencia is a great way to improve your chances of tailoring your skill set to benefit Boards, and find organisations to approach.

"A six year old could be a good NED, it's about taking a fresh angle, thinking creatively"

The course took place in Bristol one wintry day. We learned about the NED role, Directors' duties and liabilities, NED skills and case studies, and how to secure a role. We also learned that most practicing NEDs don't fully understand the role of a NED (allegedly).

"A non executive director was a bit like a bidet - no one knows what it does, but it adds a bit of class" Michael Grade, former chair, BBC

But business sustainability professionals naturally have a strong moral compass (allegedly), and as long as they understand that they are there to support the success of the company and its Board then they can be of benefit.

NEDs and Directors have the same liabilities but different responsibilities. Independence of NEDs means they can be the fresh pair of eyes and ears to support (i) the way the company meets its commercial objectives and (ii) the effectiveness of the Board.

We learned that Boards often forget that one of the key motivations for Governance is ensuring the availability of human resources (not just financial resources). Sustainability practitioners understand business success from a wider perspective (sometimes called People Planet Profit), and HR quality, safety and metrics are core to their work.

Also, we learned that many Boards may see financial risk as their highest risk, but in fact it's not. Reputation is the biggest risk factor. Sustainability professionals understand how different functions, operations and performance can affect reputation (and market cap) as a result of impacts right across the 'value chain' of a company. You want examples? Give us a call!

Also, we learned that Board composition needs to be diverse. Not just ethnicity and gender. But backgrounds, levels of creativity, thinking out the box, risk perspectives from different quarters are all apparently of use to a Board (they just may not realise it though!).

And we'll not forget the statutory duties of a Board with respect to legislation relating to health & safety, environment, corporate manslaughter, anti-bribery, modern slavery... Sustainability people live and breathe this.

The Companies Act 2006 also is hot on ensuring the success of a company accounts for long-term decisions, supply chain responsibility, environmental impact, community impact and reputation (for example). And the duties it confers are owed to shareholders AND stakeholders. Stakeholder engagement is so core to sustainability approaches that it's good to see this in the Act.

So, there are plenty of good reasons why sustainability folk can help a Board. In Bristol, we all thought that if you don't have the qualifications that companies and recruiters list in NED vacancy notices then perhaps they haven't fully understood what's required of a successful Board themselves! Maybe they have, but it doesn't hurt to ring them up and probe...

And if you read the FT, you may have read that NED is role for which no one is qualified.

"The list of attributes required of a non-executive director is so long, precise and contradictory that there cannot be a single board member in the world who fully fits the bill" FT 2013

So, to recruiters and Boards out there, think you know what you need? We learned that it's worth double checking. We look forward to supporting your Board!

Alex Nichols

Oxford, 2017

About the Author

Alex Nichols

Alex Nichols provides Sustainability and Corporate Responsibility services for a positive business impact

  • 20 years of professional sustainability management consulting experience.
  • Solid international experience in sustainability strategy, reporting, materiality, stakeholder engagement, assurance, training delivery.
  • Clean technology marketing and promotion.
  • Deep working knowledge of the GRI framework and other reporting guidelines and standards.
  • Experienced trainer in certified sustainability management courses
  • Diverse sectors including automotive, construction, mining & metals, paper & pulp, waste, energy, food & beverage, rail, tobacco and manufacturing.
  • Successful industrial, NGO and government projects.
  • Global track record: Europe, Turkey, Brazil, Jordan, Malawi, UAE and Australia

Sustainability folk make good NEDs
Article Name
Sustainability folk make good NEDs
Yes, believe it or not if you have a reasonably good appreciation of business, corporate governance and sustainability risk, you can offer valuable support to Boards of private companies, charities and others. How?
Alex Nichols Consulting

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