Last month, Livingston James Director Sophie Randles hosted the latest instalment in the NED Forum event series in partnership with KPMG. Sophie provides an overview of the discussion at the event below, which explored the importance of focusing on ESG at the NED level.
There has been a noticeable trend of leaders aspiring to become Non-Executive Directors (NEDs) earlier in their careers, with the core drivers for this being diversity of experience and strategic influence outside the day-to-day operations (Actuate Global, 2024). In response to this, Livingston James and KPMG created an event series earlier this year called the ‘NED Forum’, a series designed to enable aspiring, new and experienced NEDs to come together to navigate the future of the NED role, build meaningful relationships, and learn from one another.
We hosted our second event in October, this time placing a focus on ESG. We were joined by an impressive panel of business leaders including Deborah Jones, Brian Mclaren and Laura Forzani who offered insight and guidance on all aspects of the ESG principles, as well as the role the NED plays.
The key topics of discussion were:
- Integrating ESG into the Business Strategy: NEDs are in a position to ensure that ESG considerations are embedded into the company’s overall strategy. This involves aligning ESG goals with the company’s mission, vision, and values, as well as confirming that these are reflected in strategic planning and decision-making. NEDs can help drive these initiatives from the top down, as they are very often pushed from the bottom up.
- Establishing Clear Governance Structures: The regulatory landscape for ESG is constantly evolving, with new requirements and guidelines being frequently introduced. Keeping up with these changes and maintaining compliance can be a significant burden. Creating dedicated ESG committees or incorporating ESG expertise directly into the Board can help in informed decision-making. This ensures that these issues receive the necessary attention and are integrated into the governance framework.
- Setting and Monitoring ESG Goals: NEDs can help set ambitious yet achievable ESG targets, such as reducing carbon emissions or increasing diversity in leadership roles. They should also ensure there are robust mechanisms for monitoring progress and holding management accountable. Obtaining reliable and comprehensive ESG data can be challenging and something many businesses struggle with.
- Stakeholder Engagement: ESG initiatives often require a long-term perspective, but companies may face pressure to deliver short-term financial results. Balancing these competing priorities can be challenging for NEDs. Engaging with stakeholders, including investors, employees, and customers, is vital. NEDs can facilitate open dialogues to understand stakeholder expectations and incorporate their feedback into ESG strategies.
- Transparency with Reporting: Ensuring transparent reporting on ESG performance is paramount. NEDs can advocate for comprehensive and accurate ESG disclosures, which help build trust with stakeholders and demonstrate the company’s commitment to sustainability. Effectively communicating the importance and benefits of ESG initiatives to all stakeholders is crucial. NEDs must ensure that there is clear and consistent messaging to gain buy-in and support across the business.
- Continuous Education and Awareness: NEDs should stay informed about the latest ESG trends, regulations, and best practices. Do not be afraid to ask the ‘daft laddie’ questions and be sure to lean in and upskill yourself on the topic. It should not be one person’s job to drive ESG; the full Board and the company should be involved.
By focusing on these areas, NEDs can effectively drive ESG strategies and contribute to the long-term sustainability and success of their businesses. This is an ever-evolving topic and requires engagement from all parties mentioned above in order to drive positive change.
You can see some of the other events we have held and attended so far in 2024 on our events page. Please reach out to Sophie Randles to learn of any upcoming events.
