Sustainability Governance and Management (ePub)

Corporate social responsibility ("CSR") is like any other important management initiative and requires proactive leadership from the top of the organization. In fact, it is clear that the "tone at the top" is an important factor in the success or failure of any CSR initiative and that the directors, executive officers and senior managers of the organization are uniquely positioned to act as internal champions of CSR and proactively communicate with everyone in the organization on a daily basis about the impact of new environmental and social products, services and activities (e.g., philanthropic projects) and CSR-related systems and processes. These leaders must also commit to investing the time and effort necessary to explain the organization's CSR initiatives to clients and customers and other stakeholders and develop and implement appropriate metrics for tracking and reporting progress. At the same time, while CSR certainly extends "beyond the law", directors and officers must remain mindful of their traditional fiduciary duties and understand how laws, regulations and standard contract provisions are rapidly evolving to incorporate environmental and social responsibility standards.

CSR has changed the playbook for organizational governance, leadership and management. Among the issues and activities that will need to be considered in establishing and maintaining effective governance and management processes for CSR implementation include understanding how CSR is changing the traditional fiduciary duties of directors and officers including the ascendance of the stakeholder-focused model and the introduction of alternative legal architectures for sustainability-oriented businesses; ensuring that the board of directors integrates environmental and social responsibility into the governance structure and the traditional roles and responsibilities of directors; designing and implementing an effective framework for board oversight of CSR and corporate sustainability; developing and implementing internal governance instruments-codes, policies and procedures-to guide organizational members on their CSR-related duties and responsibilities and provide a foundation for decision making; designing effective internal organizational structures and systems for managing CSR initiatives and programs and supporting CSR commitments and expectations such as preparation and distribution of sustainability reports and stakeholder engagement; integrating CSR into the duties and responsibilities of the chief executive officer and other members of the C-suite team, as well as into their compensation arrangements, and developing job responsibilities for a new breed of sustainability executives; and identifying and counseling directors, officers, managers and employees on ethical issues that will arise as they discharge their responsibilities with respect to CSR and work to enhance and maintain the reputation of the organization.

CSR requires organizations to look beyond traditional economic performance to consider the impact of their activities on the environment and society in which they operate and on stakeholders other than the owners of the organization; however, pursuit of CSR relies on many of the same basic governance and management processes that have been developed in the business world (e.g., planning, acquiring and deploying resources, building products and systems and monitoring execution of day-to-day operations). At the same time, the emergence of CSR has fueled interest in new skill sets including sustainable leadership and ethical management. This book is intended to provide sustainable entrepreneurs with a comprehensive guide to governing, leading and managing a successful sustainability-focused business.