Corporate boards raise concerning knowledge gaps when it comes to sustainability, new global research finds - Seite 3

Boards increase focus on sustainability—but gaps remain

There has been an undeniable shift in the expectations for the role of business in society which has created new challenges and competency requirements for board members. These heightened expectations have added to boards' traditional responsibilities to oversee finances, manage risk, and select company leadership - all at a time when boards must rapidly upskill on the implications of AI, new geopolitical risk, and a changing world of working models.

More than two-thirds of respondents (69%) reported that boards' expanding remit is increasing time requirements for directors. The share was higher for directors in the energy (77%) and finance and insurance (74%) sectors, two sectors in which balancing the world's need for more energy with climate change is creating significant new risks and opportunities. 

"Sustainability has become part of boards' fiduciary duty and steadily gaining priority on boards' agenda as its importance continues to permeate across the fabric of business and society," said Sonia Tatar, Executive Director of the INSEAD Corporate Governance Centre.

She added that, "More than ever, the weighted responsibility on boards is pointing to the imperative for targeted education to bridge the knowledge gaps which are fundamental in driving governance transformation starting from non-conventional stewardship from the top to collective leadership across the various stakeholders and within the organizational spectrum that deliver sustainable impact and actions."

Are Board Member Profiles to Blame?

A combined 48% of respondents confirmed that knowledge or experience with sustainability is either "not at all" or just "slightly" part of the competency matrix for their board selection. Perhaps surprisingly, this rises to 24% of board members stating that sustainability experience is "not at all" part of the assessment criteria for CEO hires.

Integrating sustainability into the business

Directors see room for improvement when it comes to integrating sustainability into decision-making across the whole business. 66% said that sustainability considerations should be fully integrated into business strategy - but just 38% said that that is the case today.

When asked what was preventing them from spending meaningful time on sustainability planning, more than 72% cited the need to devote time to non-sustainability-related, high-priority topics.