Governance Surveys
Anyone that's a sports enthusiast or a current or former athlete can appreciate the play that changes the momentum of the game. It's the play that sparks the 10-0 run and the roar of the crowd. It's the play that rallies the team and forces the timeout by the opposition to slow down the pace of the game.
As a former basketball player and swimmer who still considers myself an athlete, I often use sports analogies in business. At 46 years old, I am still highly competitive and make exercise part of my daily lifestyle. I'm an avid runner, swimmer, cyclist, and yogi who believes exercise is as much about mental health as it is about physical health.
I liken momentum to the human metabolism. A high metabolism gets increasingly difficult to maintain with age; it's equally as hard to maintain a constant state of momentum. Both metabolism and momentum require continuous effort and have unforeseen challenges. As an example, the metabolism must be constantly shocked to maintain as we get older. This means changing up the workout and maintaining a good diet. Often times, the biggest challenge to controlling the metabolism is our fork and what we put in our bodies.
Momentum in business can be equally challenged by unforeseen events and emerging trends, all while being stuck in the mindset of "this is how it's always been done," lacking innovation and a current strategy, and having a stagnant board or management team.
One notable emerging trend is the emphasis on how companies are responding to environmental, social, and governance (ESG) matters. ESG has broadened the definition of the "stakeholder" in business. Private company key stakeholders, once viewed in large part as the ownership, now include its employees, the environment, sources of capital, customers, and the supply chain. A great example of a large private company embracing ESG and its stakeholders is Recology, headquartered in San Francisco. The 100-percent employee-owned company employs 4,000 employees and operates in three Western states. Recology issued its first sustainability report in 2019 with an emphasis on stewardship to produce zero waste, manage human capital, and strengthen corporate governance. The board has incorporated ESG into its governance committee structure and is engaged with management in evolving company reporting standards.
Quick tips to help you get started or evolve your ESG strategy:
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Get educated about ESG;
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Read the recently issued white paper by The World Economic Forum called "Measuring Stakeholder Capitalism," and discuss its recommendations with your board and management team;
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Begin to formulate an ESG roadmap that details environmental, human capital, leadership, and governance impacts;
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Determine what information you are already collect and track (quick wins);
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Determine key stakeholders (internal and external) and evaluate the level of engagement with each;
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Evaluate customers and suppliers who may require ESG reporting from your company to continue to do business with you and what they will likely require in the way of report validation;
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Determine your audience and what information should be publicly presented versus privately retained;
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Research publicly available ESG-related information about your competition (good places to start are with the Sustainability Accounting Standards Board, the Global Reporting Initiative, and individual company disclosures and reporting activity);
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Identify best-in-class private companies and model their ESG practices.
Lastly, recognize ESG as a game-changer for corporate America—public and private companies alike. Ask yourself: What will cause the play that changes the course of your game? Is your company a sure win and up by 20 points, or is your company the one that needs to call a timeout to re-evaluate the play and turn the momentum in your favor?
Christa Steele currently serves on the boards of Recology, Tanimura & Antle, Brainchip Holdings and OFG Bancorp. Steele is also an NACD Board Leadership Fellow and Vice Chair of NACD Northern CA.