The Conference Board Governance Center Blog

Aug
25
2016

“Activists Are Not the Culprit: So Don’t Shoot the Messenger”

By Charles M. Nathan, Senior Advisor, at Finsbury

The Conference Board Governance Center has been heavily engaged in the current discussion in the marketplace on “long-termism versus short-termism,” most notably with our publication of the report “Is Short-Termism Jeopardizing the Future Prosperity of Business.” At the Governance Center, we believe in presenting differing points of view. In the following post, Charles Nathan presents a contrarian view and challenges some of the conclusions of our report. We encourage others to engage in the debate and consider other points of view.

In current discussions about the reasons for our weak economic recovery, a number of propositions have achieved the hallowed status of articles of faith among public company managements, many notable observers of our economy[i], the financial press, the political classes and great swathes of the public. Three of the most cherished are that short-termism is bad, long-termism is good and activist investors are responsible for much of the short-termism afflicting corporate America. These alleged truisms are based on a series of critical fallacies.

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Aug
25
2016

Fact of the Week: Sustainability issues are a priority for CEOs, yet few heads of sustainability report directly to CEOs

By Matteo Tonello, Managing Director, Corporate Leadership at The Conference Board

Global CEOs now rank “sustainability” among their top five business challenges. However, despite sustainability issues moving to the center of CEO priorities, few heads of sustainability report directly to the CEO. A survey by The Conference Board of sustainability executives shows only 16 percent of respondents indicate their companies’ head of sustainability reports directly to the CEO. Instead, most heads of sustainability report one level down from the CEO, typically to a COO or head of operations. Companies aiming to elevate sustainability discussions to a strategic level should consider evaluating the degree of access to the CEO and the board that is given to their head of sustainability.

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Aug
17
2016

Fact of the Week: When it comes to leadership in sustainability, CEOs may be focusing on the wrong things

By Matteo Tonello, Managing Director, Corporate Leadership at The Conference Board

When it comes to leadership in sustainability, CEOs may be focusing on the wrong things

In a recent survey by The Conference Board, sustainability executives almost unanimously agree that board engagement on sustainability issues is one of the strongest indicators of leadership in corporate sustainability. Results from the separate CEO Challenge survey, however, reveal CEOs may be missing this message: When asked about their top strategies for meeting the sustainability challenge, less than 10% of CEOs chose “strengthen board oversight of sustainability issues.” Given the strong association between board engagement and sustainability leadership, CEOs should consider examining their boards’ level of engagement and oversight of sustainability issues.

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Aug
10
2016

Fact of the Week: Board engagement on sustainability issues is a strong indicator of leadership in sustainability, yet these issues remain absent from most company board discussions

By Matteo Tonello, Managing Director, Corporate Leadership at The Conference Board

Board engagement on sustainability issues is a strong indicator of leadership in sustainability, yet these issues remain absent from most company board discussions

Results from a survey by The Conference Board show executives point to board engagement on sustainability issues as a strong indicator of leadership in corporate sustainability. However, at many companies the sustainability function rarely meets with the board of directors. Results from the survey reveal that more than half of respondents (55%) indicate their companies’ sustainability and/or EH&S functions meet with the board of directors only once per year or never. When these functions do meet with the board, the amount of time spent discussing these issues is low: 69% of respondents indicate their boards spend only two to four hours per year discussing sustainability issues. One reason for the low amount of time that directors spend on sustainability is that many companies do not have adequate sustainability expertise on their boards. For instance, research from Ceres found that among a large sample of directors who sit on sustainability committees, only 19% had discernible expertise in sustainability issues.

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Aug
03
2016

Fact of the Week: Just over one-third of companies assign responsibility for sustainability oversight to the board

By Matteo Tonello, Managing Director, Corporate Leadership at The Conference Board

Just over one-third of companies assign responsibility for sustainability oversight to the board.

A survey by The Conference Board shows executives point to board engagement on sustainability issues as a strong indicator of leadership in corporate sustainability. Yet a separate survey of 307 SEC-registered businesses shows only 36% of businesses assign responsibility for sustainability oversight to the board. However, there are significant variations by company size, as almost 68% of companies with revenues of more than $20 billion assign this responsibility to the board. Among these larger companies, sustainability oversight is most often assigned to a dedicated standing committee of the board or to an existing nominating/governance committee. Among smaller companies – those with revenues below $1 billion – sustainability oversight typically falls to the CEO or to a senior executive reporting directly to the CEO.

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