How are you ensuring that companies are accountable for meaningful climate action and managing climate-related risks effectively?
The foundation of accountability lies in having well-trained, informed boards. Directors can’t make responsible decisions without the right knowledge and tools. Many boards are increasingly discussing critical climate issues—whether that’s related to the green transition or responding to natural disasters like hurricanes and flooding. However, there's often a gap in understanding, leading to an oversight of opportunities in addition to risks. Boards need comprehensive transition plans that address not just immediate needs but also the future, ensuring accountability across the company and within the supply chain.
Accountability extends beyond individual company actions. Directors need to recognize the interconnected nature of these issues to support resilient, forward-looking strategies. Without proper training, boards can find themselves navigating blind. Competent Boards was founded to address this by providing directors with high-quality training that defines what quality governance means. Effective governance requires seeing climate and sustainability issues as integrated components of broader leadership and strategy—not as isolated “pet projects.” This integration ensures that boards are prepared to shape their company's future proactively, rather than reacting to each new challenge.
What are the key challenges you encounter when educating boards, especially in sustainability?
One significant challenge is fostering curiosity among directors. It’s crucial for board members to look forward, not just rely on past experiences. One of our faculty members, Chad Holliday, former chair of Shell and Bank of America, emphasized the importance of having directors who possess both insight and foresight. Boards need members who can understand the nuances of the green transition, transforming aspirations into actionable plans that support the company's and society's success.
The motivation behind founding Competent Boards was to fill this gap, providing directors with training that aligns governance with sustainability goals. Effective boards don’t categorize issues like climate and governance in separate boxes; instead, they understand that quality governance encompasses all these aspects. The challenge is often to equip directors with the necessary tools and expertise to ask the right questions and set a clear standard for governance. Without a robust understanding and a future-oriented mindset, directors risk leading companies without a clear, sustainable path forward.
When crises occur, like COVID-19 or a natural disaster, companies often shift focus away from sustainability. How can boards ensure that sustainability remains a priority, even during such crises?
A recurring issue in times of crisis is that sustainability can be sidelined if it's treated as a separate initiative rather than an integral part of the company’s strategy. Boards must understand that sustainability is not merely a marketing tool; it’s fundamental to the long-term survival of both the company and the communities it operates in. Companies can’t thrive in a failing society, so it’s essential to embed sustainability deeply into governance structures and decision-making processes.
Maintaining a long-term perspective is key, especially as boardroom tenure often outlasts that of CEOs. The board represents continuity, even amid changes in leadership. By asking forward-thinking questions and emphasizing sustainability within the company’s core strategy, boards help ensure that these values aren’t discarded when faced with immediate challenges. Sustainable governance is not a short-term trend; it’s essential for building resilience and enduring success.
You’ve mentioned the importance of education and insight across all levels of governance. What role do boards play in advancing the circular economy, and how can companies shift towards more sustainable business models?
Boards are pivotal in steering companies towards sustainable practices by fostering an understanding of the circular economy.
Directors need to recognize that one company’s waste could be another’s resource, and this mindset shift starts in the boardroom. A strong focus on research and development is also essential, where boards should guide companies to design products with the circular economy in mind, reducing waste and enhancing sustainability.
For instance, during my work with large shipping companies, we discussed how their operations could be adapted to more sustainable models. This kind of innovation requires not only board-level support but also collaboration across industries. At Competent Boards, we see directors who have completed our programs advancing sustainability initiatives within their companies, often bringing newfound confidence and knowledge to ask the right questions. These insights enable them to advocate for and implement circular practices, demonstrating that good governance directly supports sustainable transformation.
Your programs have reached directors globally, providing insight from various industries and regions. Could you tell us more about the value these programs bring and how they benefit board members?
Our programs are structured to deliver a global perspective. With graduates in nearly 60 countries, participants gain diverse insights by learning from board directors and experts worldwide. This peer-to-peer learning environment allows them to benefit from shared experiences—the successes, failures, and challenges faced by others. In a world where business conditions evolve rapidly, staying updated on global best practices is essential for effective governance.
These programs enable directors not only to understand emerging issues but to apply practical solutions within their organizations. Peer discussions often lead to new collaborative ideas, especially in areas like the circular economy. The directors gain both the tools to guide their companies and the confidence to ask insightful questions. With these resources, they are better prepared to shape the future of their companies and contribute to a sustainable global economy.
Finally, for those reading this, what message would you like to leave for board members regarding their role in the green transition?
Board members are instrumental in making or breaking the green transition. My message is to prioritize having specialized knowledge and insight at every level, not just within the boardroom but throughout the organization. This expertise is essential to navigate the complex challenges of sustainability and climate change. By equipping themselves with the tools and foresight needed, board members can drive their companies toward responsible and effective climate action.
The green transition isn’t about quick fixes but about fostering a long-term vision and executing short-term actions that align with that vision. Directors must champion these efforts, not only for the success of their companies but for the well-being of the broader society. As stewards of the future, their leadership can be a catalyst for lasting change, ensuring a resilient and sustainable path forward.
