Thanks for visiting BITC! Our website is currently under development and we'd love to hear your thoughts and suggestions – please let us know what you think here.

Close 

CR Index 2014: Leadership – The role of the board

Companies participating in the CR Index 2014 have shown there is significantly more board governance of non-financial issues material to the business over the past decade. Ten years ago (2004) only 65% of companies regularly discussed CR areas at board meetings. Now, this has risen to 98%.

Effective corporate governance is fundamental to the long-term sustainability and success of Reed Elsevier’s operations

- Anthony Habgood,
Chairman, Reed Elsevier
While four in five or 83% have formal CR committee, which gives recommendations to the board, only a third of companies report that their board has formally reviewed, approved specific actions and discussed progress of their key CR issues.

61% of CR Index participants provide evidence of sustainability mindset and experience of board members, but a closer scrutiny of this particular question in the Index reveals that only 1 in 10 companies  have actually developed a capability/ experience matrix for board members that includes corporate sustainability, as recommended by the report produced by the Doughty Centre and Business in the Community on boardroom mindsets.

Having a board with diverse perspectives is crucial to maximize opportunities and challenges for the business. 4 in 5 consider diversity when appointing new board members. Most have a target for gender diversity (54%), although only half of these can demonstrate progress against targets. Significantly less (30%) have targets on ethnic representation at board level.

How are leading companies addressing the mindset of the board?

Reed Elsevier conducted an evaluation of board level CR mindset and published skills and experience to shareholders in its annual report.

L&Q’s Group Board members’ Role Profile and Person Specification details required experience, skills, and abilities, including knowledge of the communities served by L&Q, and diversity issues.   

Royal Mail Board performance reviews include board composition to ensure its effectiveness, and that there is a mix of expertise, experience and knowledge of the Group and its issues.

Gentoo has a board appraisal process for each Board Member which ensures alignment with the culture and values of the organisation.

 

Other companies, such as Calor Gas and Southern Water have provided specific training to develop their board's knowledge and understanding of sustainable business.

Read the full report.