U.S. Corporate Boards Suffer from Inadequate Expertise in Financially Material ESG Matters

A new study by Professor Tensie Whelan finds that fewer than one percent of US boards of directors include members with competence in climate change, cybersecurity, and other ESG concerns.

Corporate sustainability and ESG investing are increasingly front and center for U.S. companies as issues such as climate change, health care and inequity have more and more impact on the bottomline.

We reviewed 1188 individual Fortune 100 board member credentials to determine whether companies with material ESG risks and opportunities had relevant expertise on their boards. We found that very few sectors and very few companies were adequately prepared at the board level for issues that were already affecting their performance — for example one property and casualty insurance company has no environmental expertise on the board in a year experiencing $100 billion in damage caused by climate change–heightened extreme weather events.

On another issue of growing materiality, cyber/telecom security, just eight directors of 1188 had expertise. We also examine COVID-19 and #blacklives matter as related to board credentials and make recommendations on how to improve board ESG governance.

U.S. Corporate Boards Suffer from Inadequate Expertise in Financially Material ESG Matters by Tensie Whelan :: SSRN

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s