Normes d’encadrement

devoir de vigilance Gouvernance Normes d'encadrement Responsabilité sociale des entreprises

Raison d’être et devoir de vigilance

Bel article de réflexion offert par Beate Sjåfjell et Jukka Mähönen (professeurs à Oslo) sur la directive vigilance : « Corporate Purpose and the EU Corporate Sustainability Due Diligence Proposal » (Oxford Business Law Blog, 25 février 2022).

Extrait

Taking sustainability seriously: sustainable value creation within planetary boundaries

The question of how to secure the contribution of our businesses to the fundamental transformation to sustainability is not one that should be responded to in the ideological and emotional way as we have seen in some of the responses when the Sustainable Corporate Governance initiative was launched. Now that the Directive proposal is out, we encourage all who wish to participate in the discussion to lay aside any ideological ‘shareholder vs stakeholders’ viewpoints. That is not what is at stake. While the IPCC report on climate change of 2021 has been referred to as ‘code red for humanity’, planetary boundaries research shows that reality is even more grim – we have a whole set of code reds for humanity and they are increasing in number (as the latest planetary boundaries research shows), and the status for the European Union is not good. Working towards sustainability also entails questions of social justice – just as we cannot silo environmental issues into various categories to be dealt with separately, we cannot separate environmental and social issues. These are all interconnected elements. All of these issues must be dealt with simultaneously. The sustainability challenges of our time are complex and interconnected and attempting to silo sustainability work into dealing piecemeal with isolated elements will not work.

While there seems generally to be an increasing consensus among governments and businesses on the need to integrate sustainability into the governance of our globalized businesses, the attempts to do this so far seem to have been based on three principles: a) as few clear and enforceable rules as possible, b) support voluntary measures although they haven’t worked  so far, and c) if we must regulate, be sure to leave company law out of the picture.

However, to get real about integrating sustainability, we need to go to company law, which is the regulatory infrastructure for decision-making in business. As all company law scholars who have analysed the sources know, company law gives a broad discretion to corporate boards and by extension senior management in their corporate governance. There is, in other words, space within the current company law and corporate governance systems to steer businesses in more sustainable directions. This has been used by some as an argument for the sanctity of company law – no need for change, move on, nothing to see here! The problem is that this discretionary space is taken up by the social norm of shareholder primacy. We therefore suggest, on the basis of over a decade of multijurisdictional comparative analyses of the drivers for and the barriers to sustainable business, that company law must take back that space and clarify why we have companies (corporate purpose) and give a principle-based instruction to boards on how to do their jobs in this era that is defined by the extreme unsustainabilities resulting from business as usual.

Sustainable value creation is already an emerging concept in corporate governance all over the world. What needs to be done is to position sustainable value creation within the ecological limits of our planet. We therefore propose both ‘sustainable value’ and ‘planetary boundaries’ as general clauses in company law, the content of which gradually can be firmed up as practice develops. This doesn’t mean we don’t think there should be any guidance in the law – quite the opposite, as we see the need to ensure that business does not take these two concepts and turn them into opportunities for greenwashing, bluewashing or ‘sustainability washing’.  Integrating these concepts into the duties of the board is therefore also paramount, outlining this in a way that provides legal certainty.

Avoiding the shareholder vs stakeholder trap does not mean that we do not in our proposal encompass a wide variety of interests affected by the company’s business. However, while involving affected communities, trade unions, and civil society is crucial, a mere canvassing of ‘stakeholder interests’ and giving priority to the ones that make themselves heard the most is insufficient, misleading and potentially destructive for the overarching purpose of sustainable value creation. The backdrop must always be the interconnected complexities and the vulnerability of the often-unrepresented groups (whether invisible workers deep in the global value chains, Indigenous communities, or future generations), and the aim of a sustainable future within planetary boundaries.

Under pressure: the proposed Corporate Sustainability Due Diligence Directive

The European Commission’s Corporate Sustainability Due Diligence Directive proposal, presented on 23 February 2022, aims to put into place mandatory and harmonised sustainability due diligence rules in the European Economic Area, in recognition of the insufficiency of voluntary action by business and the regulatory chaos that business faces in its cross-border activities.

The proposed Directive is appropriately named ‘Corporate Sustainability Due Diligence’, resonating in title with the proposed Corporate Sustainability Reporting Directive. It is positive that the Corporate Sustainability Due Diligence Directive proposal clarifies which environmental and human rights issues are intended to be included. However, a broader approach is needed, drawing on a research-based concept of sustainable value creation within planetary boundaries.

The proposal builds on a due diligence duty for the members of the board and the chief executive officer of the company. It reflects the international human rights and environmental international law obligations and concretises the steps of the due diligence process. There is, however, a danger of box ticking instead of principle-based evaluations of risks of unsustainability.

There are proposals for both public and private enforcement, including civil liability for the board members and the chief executive officer, which makes this proposal different from much of what we have otherwise seen in the corporate sustainability area. The scope of the proposal is however extremely narrow, excluding in its direct application all small and medium-sized enterprises, and covering only some 13,000 EU companies and some 4,000 third-country companies.

The proposal takes an important core company law step, which we have advocated in our work, namely to clarify that the duty of the board (strangely formulated as a duty, in Anglo-Saxon speak, for all ‘directors’) is to promote the interests of the company. Wisely, there is no attempt to harmonize this (and especially not by including some kind of stakeholder language), rather leaving the content of the interests of the company to the variety of company law regimes in Europe. What is missing, however, is further situating this duty within an overarching purpose of sustainable value creation within planetary boundaries, which would have given a clearer sustainability-oriented framing for the whole proposal. 

The proposal does employ misleading stakeholder language in the consultation duties as part of due diligence, where it would have been better to specify that the consultation should take place with affected communities, groups and people.

The proposed Directive is clearly a product of the tension resulting from, on the one hand, the social norm of shareholder primacy and the drive to keep company law untouched by sustainability issues, and on the other hand, the willingness to make necessary changes to mitigate the extreme unsustainabilities of business as usual. We see this in the way core company law issues are relegated to the end of the proposal. It would have been much more logical to set out clearly in the beginning of the proposed Directive the core duties of the boards to ensure that sustainability due diligence is used as a key tool for integrating sustainability into the entire business of the company.

The Directive proposal needs to be strengthened on a number of points, and it is now to be discussed further by the European Parliament and the Council, before it can be adopted with possible revisions. We strongly recommend that subsequent work with the Directive proposal be based on a research-based concept of sustainability and take company law and corporate governance seriously, rather than allowing the misleading shareholder vs stakeholder dichotomy to set the parameters for continued siloing of core company law as the regulatory infrastructure for corporate decision-making.

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Gouvernance Normes d'encadrement objectifs de l'entreprise parties prenantes Responsabilité sociale des entreprises Valeur actionnariale vs. sociétale

Actionnaires et parties prenantes : quelle gouvernance à venir ? : un beau texte de l’IGOPP

À l’été 2020, Yvan Allaire et François Dauphin ont publié une belle tribune dans Le Devoir intitulé : « Actionnaires et parties prenantes : quelle gouvernance à venir ? ». Ils démontrent tout leur scepticisme en mettant en lumière les zones d’ombre du modèle des parties prenantes.

En raison surtout d’une véritable révolution des modes et quanta de rémunération des hauts dirigeants, les sociétés cotées en bourse en sont venues graduellement depuis les années ’80s à œuvrer presqu’exclusivement pour maximiser la création de valeur pour leurs actionnaires.

Tout au cours de ces 40 ans, ce modèle de société fut critiqué, décrié, tenu responsable pour les inégalités de revenus et de richesse et pour les dommages environnementaux. Toutefois, tant que cette critique provenait d’organisations de gauche, de groupuscules sans appui populaire, les sociétés pouvaient faire fi de ces critiques, les contrant par des campagnes de relations publiques et des ajustements mineurs à leur comportement.

Soudainement, pour des raisons multiples, un peu mystérieuses, cette critique des entreprises et du « capitalisme » a surgi du cœur même du système, soit, de grands actionnaires institutionnels récemment convertis à l’écologie. Selon cette nouvelle perspective, les sociétés cotées en bourse devraient désormais non seulement être responsables de leurs performances financières, mais tout autant de l’atteinte d’objectifs précis en matière d’environnement (E), d’enjeux sociaux (S) et de gouvernance (G). Pour les grandes entreprises tout particulièrement, le triplé ESG, de facto le modèle des parties prenantes, est devenu une caractéristique essentielle de leur gouvernance.

Puis, signe des temps, quelque 181 PDG des grandes sociétés américaines ont pris l’engagement, il y a un an à peine, de donner à leurs entreprises une nouvelle «raison d’être » (Purpose en anglais) comportant un « engagement fondamental » envers clients, employés, fournisseurs, communautés et leur environnement et, ultimement, les actionnaires.

De toute évidence, le vent tourne. Les questions environnementales et sociales ainsi que les attentes des parties prenantes autres que les actionnaires sont devenues des enjeux incontournables inscrits aux agendas politiques de presque tous les pays.

Les fonds d’investissement de toute nature bifurquèrent vers l’exigence de plans d’action spécifiques, de cibles mesurables en matière d’ESG ainsi qu’un arrimage entre la rémunération des dirigeants et ces cibles.

Bien que louable à bien des égards, le modèle de « parties prenantes » soulève des difficultés pratiques non négligeables.

1. Depuis un bon moment la Cour suprême du Canada a interprété la loi canadienne de façon favorable à une conception « parties prenantes » de la société. Ainsi, un conseil d’administration doit agir exclusivement dans l’intérêt de la société dont ils sont les administrateurs et n’accorder de traitement préférentiel ni aux actionnaires ni à toute autre partie prenante. Toutefois la Cour suprême n’offre pas de guide sur des sujets épineux conséquents à leur conception de la société : lorsque les intérêts des différentes parties prenantes sont contradictoires, comment doit-on interpréter l’intérêt de la société? Comment le conseil d’administration devrait-il arbitrer entre les intérêts divergents des diverses parties prenantes? Quelles d’entre elles devraient être prises en compte?

2. Comment les entreprises peuvent-elles composer avec des demandes onéreuses en matière d’ESG lorsque des concurrents, domestiques ou internationaux, ne sont pas soumis à ces mêmes pressions?

3. À un niveau plus fondamental, plus idéologique, les objectifs ESG devraient-ils aller au-delà de ce que la réglementation gouvernementale exige? Dans une société démocratique, n’est-ce pas plutôt le rôle des gouvernements, élus pour protéger le bien commun et incarner la volonté générale des populations, de réglementer les entreprises afin d’atteindre les objectifs sociaux et environnementaux de la société? Mais se peut-il que cette conversion des fonds d’investissement aux normes ESG et la redécouverte d’une « raison d’être » et des parties prenantes par les grandes sociétés ne soient en fait que d’habiles manœuvres visant à composer avec les pressions populaires et atténuer le risque d’interventions « intempestives » des gouvernements?

4. Quoi qu’il en soit, le changement des modes de gestion des entreprises, présumant que cette volonté est authentique, exigera des modifications importantes en matière d’incitatifs financiers pour les gestionnaires. La rémunération des dirigeants dans sa forme actuelle est en grande partie liée à la performance financière de l’entreprise et fluctue fortement selon le cours de l’action. Relier de façon significative la rémunération des dirigeants à certains objectifs ESG suppose des changements complexes qui susciteront de fortes résistances. En 2019, 67,2% des firmes du S&P/TSX 60 ont intégré au moins une mesure ESG dans leur programme de rémunération incitative. Toutefois, seulement 39,7% ont intégré au moins une mesure liée à l’environnement. Quelque 90% des firmes qui utilisent des mesures ESG le font dans le cadre de leur programme annuel de rémunération incitative mais pas dans les programmes de rémunération incitative à long terme. Ce fait est également observé aux États-Unis, alors qu’une étude récente de Willis Towers Watson démontrait que seulement 4% des firmes du S&P 500 utilisaient des mesures ESG dans des programmes à long terme.

5. N’est-il pas pertinent de soulever la question suivante : si l’entreprise doit être gérée selon le modèle des « parties prenantes », pourquoi seuls les actionnaires élisent-ils les membres du conseil d’administration? Cette question lancinante risque de hanter certains des promoteurs de ce modèle, car il ouvre la porte à l’entrée éventuelle d’autres parties prenantes au conseil d’administration, telles que les employés. Ce n’est peut-être pas ce que les fonds institutionnels avaient en tête lors de leur plaidoyer en faveur d’une conversion ESG.

Un vif débat fait rage (du moins dans les cercles académiques) sur les avantages et les inconvénients du modèle des parties prenantes. Dans le milieu des entreprises toutefois, la pression incessante des grands investisseurs a converti la plupart des directions d’entreprises à cette nouvelle religion ESG et parties prenantes même si plusieurs questions difficiles restent en suspens.

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autres publications Gouvernance Normes d'encadrement parties prenantes place des salariés Publications

Parution récente : La place des salariés dans l’entreprise

Ouvrage qui mérite d’être lu : « La place des salariés dans l’entreprise » chez Mare et Martin. Un bel ouvrage d’Emmanuelle Mazuyer dont je recommande la lecture…

Résumé

Cinquante ans après les accords de Grenelle qui ont acté la création de la section syndicale dans les entreprises, et au moment des débats autour de la loi PACTE ambitionnant de « mieux associer les salariés à la vie et aux résultats des entreprises », ces contributions du présent ouvrage, mettent en perspective les questions fondamentales que soulève la problématique de la représentation et de l’implication des salariés dans l’entreprise.

Elles ont été pensées et organisées suivant la progressivité des formes d’association et de participation des salariés, de la verticalité vers davantage d’horizontalité, moins d’autoritarisme et peut-être plus de démocratie.

Cet ouvrage offre ainsi des regards croisés sur les différentes modalités de participation et d’implication (financière, actionnariale, syndicale, directe) des salariés à la gouvernance de l’entreprise. Critique, il interroge la distinction habituelle de la répartition des pouvoirs entre détenteurs du capital et force de travail dans l’entreprise. Novateur, il envisage les salariés en tant que parties prenantes ou actionnaires, voire dirigeants d’entreprises dans certains cas, afin d’offrir une vision large du rôle qu’ils peuvent jouer. Ouvert, il permet une lecture pluridisciplinaire (droit et économie) et comparée (droit anglais) sur la place des salariés dans l’entreprise.

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devoir de vigilance Gouvernance normes de droit parties prenantes Responsabilité sociale des entreprises

UE et devoir de vigilance

Où s’en va l’UE avec le devoir de vigilance ? M. Farid Baddache propose une synthèse avec des pistes de réflexions : « L’UE veut un devoir de vigilance sur les droits humains obligatoire en 2021 » (Ksapas, 4 juin 2020).

Résumé :

Depuis plus de 10 ans, les entreprises appliquent les Principes Directeurs des Nations Unies sur les Entreprises et les Droits de l’Homme. Faisant écho à de multiples réglementations nationales – notamment en Californie, en France, au Royaume-Uni, aux Pays-Bas ou en Allemagne – la Commission Européenne a annoncé la mise en œuvre d’une directive sur la diligence raisonnable obligatoire en matière de Droits Humains en 2021. Quels sont les retours des entreprises à date ? Une directive européenne peut-elle imposer le respect des Droits Humains sur l’ensemble des chaînes d’approvisionnement, au-delà de ce qui existe déjà ? Quel impact la pandémie Covid-19 pourrait-elle avoir sur son éventuelle application ?

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actualités internationales Gouvernance Normes d'encadrement parties prenantes Responsabilité sociale des entreprises

Pour un comité social et éthique en matière de gouvernance

Dans BoardAgenda, Gavin Hinks propose une solution pour que les parties prenantes soient mieux pris en compte : la création d’un comité social et éthique (déjà en fonction en Afrique du Sud) : « Companies ‘need new mechanism’ to integrate stakeholder interests » (4 septembre 2020).

Extrait :

While section 172 of the Companies Act—the key law governing directors’ duties—has been sufficiently flexible to enable companies to re-align themselves with stakeholders so far, it provides no guarantee they will maintain that disposition.

In their recent paper, MacNeil and Esser argue more regulation is needed and in particular a mandatory committee drawing key stakeholder issues to the board and then reporting on them to shareholders.

Known as the “social and ethics committee” in South Africa, a similar mandatory committee in the UK considering ESG (environmental, social and governance) issues “will provide a level playing field for stakeholder engagement,” write MacNeil and Esser.

Recent evidence, they concede, suggests the committees in South Africa are still evolving, but there are advantages, with the committee “uniquely placed with direct access to the main board and a mandate to reach into the depths of the business”.

“As a result, it is capable of having a strong influence on the way a company heads down the path of sustained value creation.”

Will stakeholderism stick?

The issue of making “stakeholder” capitalism stick has vexed others too. The issue was a dominant agenda item at the World Economic Forum’s Davos conference this year, as well as becoming a key element in the presidential campaign of Democrat candidate Joe Biden.

Others worry that stakeholderism is a talking point only, prompting no real change in some companies. Indeed, when academics examined the practical policy outcomes from the now famous 2019 pledge by the Business Roundtable—a group of US multinationals—to shift their focus from shareholders to stakeholders, they found the companies wanting.

In the UK, at least, some are taking the issue very seriously. The Institute of Directors recently launched a new governance centre with its first agenda item being how stakeholderism can be integrated into current governance structures.

Further back the Royal Academy, an august British research institution, issued its own principles for becoming a “purposeful business”, another idea closely associated with stakeholderism.

The stakeholder debate has a long way to run. If the idea is to gain traction it will undoubtedly need a stronger commitment in regulation than it currently has, or companies could easily wander from the path. That may depend on public demand and political will. But Esser and MacNeil may have at least indicated one way forward.

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engagement et activisme actionnarial finance sociale et investissement responsable Gouvernance mission et composition du conseil d'administration Normes d'encadrement parties prenantes Responsabilité sociale des entreprises

COVID-19, purpose et critères ESG : une alliance nécessaire

Billet à découvrir sur le site de Harvard Law School Forum on Corporate Governance pour y lire cet article consacré à la sortie de crise sanitaire et aux apports de la raison d’être et des critères ESG : « ESG and Corporate Purpose in a Disrupted World » (Kristen Sullivan, Amy Silverstein et Leeann Galezio Arthur, 10 août 2020).

Extrait :

Corporate purpose and ESG as tools to reframe pandemic-related disruption

The links between ESG, company strategy, and risk have never been clearer than during the COVID-19 pandemic, when companies have had to quickly pivot and respond to critical risks that previously were not considered likely to occur. The World Economic Forum’s Global Risks Survey 2020, published in January 2020, listed “infectious diseases” as number 10 in terms of potential economic impact, and did not make the top 10 list of risks considered to be “likely.” The impact of the pandemic was further magnified by the disruption it created for the operations of companies and their workforces, which were forced to rethink how and where they did business virtually overnight.

The radical recalibration of risk in the context of a global pandemic further highlights the interrelationships between long-term corporate strategy, the environment, and society. The unlikely scenario of a pandemic causing economic disruption of the magnitude seen today has caused many companies—including companies that have performed well in the pandemic—to reevaluate how they can maintain the long-term sustainability of the enterprise. While the nature and outcomes of that reevaluation will differ based on the unique set of circumstances facing each company, this likely means reframing the company’s role in society and the ways in which it addresses ESG-related challenges, including diversity and inclusion, employee safety, health and well-being, the existence of the physical workplace, supply chain disruptions, and more.

ESG factors are becoming a key determinant of financial strength. Recent research shows that the top 20 percent of ESG-ranked stocks outperformed the US market by over 5 percentage points during a recent period of volatility. Twenty-four out of 26 sustainable index funds outperformed comparable conventional index funds in Q1 2020. In addition, the MSCI ACWI ESG Leaders Index returned 5.24 percent, compared to 4.48 percent for the overall market, since it was established in September 2007 through February 2020. Notably, BlackRock, one of the world’s largest asset managers, recently analyzed the performance of 32 sustainable indices and compared that to their non-sustainable benchmarks as far back as 2015. According to BlackRock the findings indicated that “during market downturns in 2015–16 and 2018, sustainable indices tended to outperform their non-sustainable counterparts.” This trend may be further exacerbated by the effects of the pandemic and the social justice movement.

Financial resilience is certainly not the only benefit. Opportunities for brand differentiation, attraction and retention of top talent, greater innovation, operational efficiency, and an ability to attract capital and increase market valuation are abundant. Companies that have already built ESG strategies, measurements, and high-quality disclosures into their business models are likely to be well-positioned to capitalize on those opportunities and drive long-term value postcrisis.

As businesses begin to reopen and attempt to get back to some sense of normalcy, companies will need to rely on their employees, vendors, and customers to go beyond the respond phase and begin to recover and thrive. In a postpandemic world, this means seeking input from and continuing to build and retain the confidence and trust of those stakeholder groups. Business leaders are recognizing that ESG initiatives, particularly those that prioritize the health and safety of people, will be paramount to recovery.

What are investors and other stakeholders saying?

While current events have forced and will likely continue to force companies to make difficult decisions that may, in the short term, appear to be in conflict with corporate purpose, evidence suggests that as companies emerge from the crisis, they will refresh and recommit to corporate purpose, using it as a compass to focus ESG performance. Specific to the pandemic, the public may expect that companies will continue to play a greater role in helping not only employees, but the nation in general, through such activities as manufacturing personal protective equipment (PPE), equipment needed to treat COVID-19 patients, and retooling factories to produce ventilators, hand sanitizer, masks, and other items needed to address the pandemic. In some cases, decisions may be based upon or consistent with ESG priorities, such as decisions regarding employee health and well-being. From firms extending paid sick leave to all employees, including temporary workers, vendors, and contract workers, to reorienting relief funds to assist vulnerable populations, examples abound of companies demonstrating commitments to people and communities. As companies emerge from crisis mode, many are signaling that they will continue to keep these principles top of mind. This greater role is arguably becoming part of the “corporate social contract” that legitimizes and supports the existence and prosperity of corporations.

In the United States, much of the current focus on corporate purpose and ESG is likely to continue to be driven by investors rather than regulators or legislators in the near term. Thus, it’s important to consider investors’ views, which are still developing in the wake of COVID-19 and other developments.

Investors have indicated that they will assess a company’s response to the pandemic as a measure of stability, resilience ,and adaptability. Many have stated that employee health, well-being, and proactive human capital management are central to business continuity. Investor expectations remain high for companies to lead with purpose, particularly during times of severe economic disruption, and to continue to demonstrate progress against ESG goals.

State Street Global Advisors president and CEO Cyrus Taraporevala, in a March 2020 letter to board members, emphasized that companies should not sacrifice the long-term health and sustainability of the company when responding to the pandemic. According to Taraporevala, State Street continues “to believe that material ESG issues must be part of the bigger picture and clearly articulated as part of your company’s overall business strategy.” According to a recent BlackRock report, “companies with strong profiles on material sustainability issues have potential to outperform those with poor profiles. We believe companies managed with a focus on sustainability may be better positioned versus their less sustainable peers to weather adverse conditions while still benefiting from positive market environments.”

In addition to COVID-19, the recent social justice movement compels companies to think holistically about their purpose and role in society. Recent widespread protests of systemic, societal inequality leading to civil unrest and instability elevate the conversation on the “S” and “G” in ESG. Commitments to the health and well-being of employees, customers, communities, and other stakeholder groups will also require corporate leaders to address how the company articulates its purpose and ESG objectives through actions that proactively address racism and discrimination in the workplace and the communities where they operate. Companies are responding with, among other things, statements of support for diversity and inclusion efforts, reflective conversations with employees and customers, and monetary donations for diversity-focused initiatives. However, investors and others who are pledging to use their influence to hold companies accountable for meaningful progress on systemic inequality will likely look for data on hiring practices, pay equity, and diversity in executive management and on the board as metrics for further engagement on this issue.

What can boards do?

Deloitte US executive chair of the board, Janet Foutty, recently described the board as “the vehicle to hold an organization to its societal purpose.” Directors play a pivotal role in guiding

companies to balance short-term decisions with long-term strategy and thus must weigh the needs of all stakeholders while remaining cognizant of the risks associated with each decision. COVID-19 has underscored the role of ESG principles as central to business risk and strategy, as well as building credibility and trust with investors and the public at large. Boards can advise management on making clear, stakeholder-informed decisions that position the organization to emerge faster and stronger from a crisis.

It has been said before that those companies that do not control their own ESG strategies and narratives risk someone else controlling their ESG story. This is particularly true with regards to how an organization articulates its purpose and stays grounded in that purpose and ESG principles during a crisis. Transparent, high-quality ESG disclosure can be a tool to provide investors with information to efficiently allocate capital for long-term return. Boards have a role in the oversight of both the articulation of the company’s purpose and how those principles are integrated with strategy and risk.

As ESG moves to the top of the board agenda, it is important for boards to have the conversation on how they define the governance structure they will put in place to oversee ESG. Based on a recent review, completed by Deloitte’s Center for Board Effectiveness, of 310 company proxies in the S&P 500, filed from September 1, 2019, through May 6, 2020, 57 percent of the 310 companies noted that the nominating or governance committee has primary oversight responsibility, and only 9 percent noted the full board, with the remaining 34 percent spread across other committees. Regardless of the primary owner, the audit committee should be engaged with regard to any ESG disclosures, as well as prepared to oversee assurance associated with ESG metrics.

Conclusion

The board’s role necessitates oversight of corporate purpose and how corporate purpose is executed through ESG. Although companies will face tough decisions, proactive oversight of and transparency around ESG can help companies emerge from recent events with greater resilience and increased credibility. Those that have already embarked on this journey and stay the course will likely be those well-positioned to thrive in the future.

Questions for the board to consider asking:

How are the company’s corporate purpose and ESG objectives integrated with strategy and risk?

  1. Has management provided key information and assumptions about how ESG is addressed during the strategic planning process?
  2. How is the company communicating its purpose and ESG objectives to its stakeholders?
  3. What data does the company collect to assess the impact of ESG performance on economic performance, how does this data inform internal management decision- making, and how is the board made aware of and involved from a governance perspective?
  4. Does the company’s governance structure facilitate effective oversight of the company’s ESG matters?
  5. How is the company remaining true to its purpose and ESG, especially now given COVID-19 pandemic and social justice issues?
  6. What is the board’s diversity profile? Does the board incorporate diversity when searching for new candidates?
  7. Have the board and management discussed executive management succession and how the company can build a diverse pipeline of candidates?
  8. How will the company continue to refresh and recommit to its corporate purpose and ESG objectives as it emerges from the pandemic response and recovery and commit to accelerating diversity and inclusion efforts?
  9. How does the company align its performance incentives for executive leadership with attaining critical ESG goals and outcomes?

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actualités internationales Gouvernance normes de droit parties prenantes place des salariés Responsabilité sociale des entreprises

Bulletin Joly Travail : deux articles à lire

Dans le dossier Droit du travail et droit des sociétés : questions d’actualité réalisé sous la coordination scientifique de Jérôme Chacornac et Grégoire Duchange, je signale deux articles intéressants touchant les thématiques du blogue :

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