Educating the Board: Bringing sustainability to life
Successful sustainability programmes are regularly sponsored at board-level on a top-down basis. Non-executive directors often have a broader and longer-term perspective than their executive colleagues and look to challenge whether the organisation is moving at a sufficient pace and grasping commercial opportunities. The challenge facing organisations is the extent to which these directors feel informed and empowered to do so. Board-level education sessions can be helpful in providing relevant and timely insights to enable this to happen.
As a consultancy, Crowe is often approached by clients for support with implementing their sustainability strategies. What has been telling in recent months is the significant increase in interest in board and executive team education sessions. This led us to reflect on why this might be and what some of the key lessons are from the programmes delivered.
At Crowe, we describe these inputs as ‘education’ and deliberately not as ‘training’. Boards are looking for practical insights and a facilitated conversation, rather than academic input or content-heavy sessions.
What are the drivers for board education?
There are two main types of drivers for these requests: defence and offence.
- Ensure an audit trail is created to demonstrate to stakeholders, such as regulators, and credit rating agencies that sustainability topics are being discussed at senior levels.
- Demonstrate to stakeholders, such as employees and investors that sustainability is integral to strategic planning within the organisation.
- Provide evidence in preparation for external auditors’ scrutiny of sustainability and related disclosures, particularly in light of recent developments such as the European Union’s Corporate Sustainability Reporting Directive.
- Help the board understand the rapidly changing regulatory environment and its complexity.
- Debate the organisation’s risk appetite and willingness to take risk on sustainability-linked issues.
- Ensure that the organisation assigns adequate resources to addressing these issues.
- Enable a board-level discussion about whether the organisation is sufficiently ambitious with their sustainability strategy.
- Review the range of business opportunities associated with sustainability including commercial partnerships, creating innovative solutions and new products.
- Determine whether the organisation is appropriately positioned and organised to succeed with these developments.
How do you implement successful board education?
Be clear on the desired outcomes.
This brings home the importance of pausing after having decided that board education may be appropriate to understand and agree on the desired outcome. Generally, boards want to be engaged in a dialogue and not presented to; the fine-tuning of the story is important to maximise impact from the limited amount of time available.
A workshop with the aim of keeping the board up to date on recent regulatory changes would look and feel very different to a session arming the board to effectively challenge whether the organisation is being ambitious enough in its sustainability stance. Boards and management teams are also often interested in peer comparison, understanding where they sit in the market, and where the market is heading.
Successful board sustainability education programmes share a few key characteristics:
- Ensure the session is grounded in the key challenges facing the organisation’s sustainability strategy and reflect recent live debates.
- Where possible use real-life case studies of management decisions particularly related to the core underwriting operations.
- Give directors sufficient insight to enable an informed debate about key aspects of sustainability strategy setting.
- Facilitate the conversation to enrich outcomes based on participants’ experiences.
- Ensures the conversation is tailored to the organisation’s level of maturity and ambition around sustainability.
- Tailor the approach key underwriting, investment and operational elements of the organisation’s model.
- Move beyond compliance with regulations to explore how the climate transition may offer business opportunities for the organisation.
- Explore the organisation’s ambition for innovation and new product development.
- Ensure that the conversation and learning process enables an informed conversation about the organisation’s willingness to take risk around sustainability.
- Create the opportunity to discuss to what extent the organisation is being ambitious enough in aligning sustainability plans with the business’s strategy, purpose, and values.
Engaging with a board can require care and planning. Considerable effort is required to adapt and tailor content to the organisation’s culture, maturity, and context. However, this investment in time is generally repaid in terms of the level of engagement and sponsorship generated from a successful intervention. This is the key difference in value between a customised session and a more generic training programme.
Through our practical and experienced team, Crowe continues to support our clients in setting their own agenda to address rapidly changing sustainability and climate-related reporting requirements. For more information, contact Alex Hindson or your usual Crowe contact.
