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The Board's Role In Embedding ESG In Organizational Culture

By Enobong Shittu

Nearly a third of business leaders agree that ESG competence will be the most desired board skill, and Environmental Social and Governance issues are now a critical strategic issue on the board’s agenda. Directors are therefore stewards of long-term organizational performance, and boards have a central role to play in ensuring that their organizations can navigate an ever-evolving ESG risk and opportunity landscape.

The role of the Board is to ensure the long-term sustainability success of the organisation. The Board’s  role in embedding ESG in an organisation is therefore one of partnership and alignment with management through the provision of oversight and direction with regard to interests that are critical to the long-term success of the company, employees, customers, communities, investors, the economy, and the society as a whole.

The Companies and Allied Matters Act 2020 imposes a responsibility on directors to act in the best interest of the company and to preserve its assets, further its business, and promote the purposes for which it was formed. This duty is statutorily required to be discharged as a diligent and ordinarily skillful director which could act in the relevant circumstances and in doing so, the director is mandated to have due regard to the impact of the company’s operations on the environment in the community where it carries on business operations. In addition to this responsibility, directors are also obliged to protect the interest of the employees and members of the organization.

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