Boards of directors play a strategic role in integrating ESG factors into an organization’s operations, something that is now essential to long-term value creation. At businesses like BCE and Michelin, committees have been formed to ensure that corporate social responsibility and environmental priorities are aligned with their overall vision. Top Canadian banks are also leading the ESG charge, committing to reduce their own greenhouse gas emissions and help high-carbon industries with their transitions rather than turn their backs on them altogether.

Which means that governance is undergoing a fundamental transformation. It is moving beyond the traditional confines of compliance to embrace a holistic approach to organizational culture, employee well-being and sustainability. And with the expectations of customers, investors, governments and other stakeholders becoming increasingly complex, boards must rise to these new demands with agility and determination. Investors and the pressures they exert are especially impactful in pushing for greater ESG expertise among today’s boards.

Canadian law is supportive of this approach, recognizing that board members are required to act in the interest of their entire organization, rather than just its shareholders. Strong governance that is inclusive and informed plays a decisive role in ensuring long-term performance. Smaller businesses are experiencing the same thing: access to funding and markets is more and more contingent on their ESG performance. Forming a board or an advisory committee is vital to bringing structure to this approach and meeting the requirements of a fast-changing economy.

DOSSIER - GOVERNANCE

Reskilling: A Governance Priority

Too many Experts on a Board of Directors

Certification in Corporate Governance

*Note that this is a summary of an article that appeared in the French-language business magazine, Gestion. The full-length article is available online in its original language.