Strategic Oversight of ESG: A Board Primer

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In brief: ESG (environmental, social, and governance) performance as criteria for investment has a growing impact on value preservation, value creation, and, ultimately, the future of the corporation itself. Directors are bound by fiduciary duties, which many argue now extend to considering ESG factors when providing oversight of strategy and risk. The broad scope and dual nature of ESG—which facilitates the creation of opportunities for business or reputational value, while also managing risks associated with ESG impacts—present a significant governance challenge for boards. 

To ensure a practical focus on how corporate boards can provide effective oversight of ESG, NACD interviewed company directors and sustainability executives representing a wide spectrum of companies varying in size, maturity, and industry. Their insights have been collected and distilled for this primer, designed for beginners looking to introduce ESG discussions in the boardroom and more experienced directors wanting to refresh and refine their knowledge. 

This resource can help your board to

  • create an organization-specific definition of ESG,
  • integrate ESG into the company’s strategy,
  • move into active board oversight of ESG, and
  • address external ESG expectations.

Most relevant audiences: ESG/CSR committee members, nominating and governance committee members, risk committee members, audit committee members, and compensation committee members