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ESG Includes Transparency: Implications for Board Director Accountability

Updated: Jul 24, 2023

ESG is a hot topic! “ESG expert” increasingly popped up on companies’ Board Skills Matrices. However, recent headlines may leave you wondering if ESG still has a place in the boardroom.


DocuSign joined other companies in pulling back from mentioning their environmental sustainability efforts, most notably omitting mentioning sustainability in recent earnings calls. Susan McPherson calls this out as greenHUSHING. Greenhushing, as opposed to greenwashing, is a fear response by companies to anti-ESG, backlash in public discussion about the role of U.S. companies in climate change and calls for social change. In celebrating #PrideMonth in June, North Face, Target, and Bud Light faced extraordinary pressure to walk-back their marketing campaigns which included LGBTQ+ community members.


The question is, does greenhushing on ESG reflect good corporate governance? While companies may be inclined to stay quiet, this silence cedes the space of market risk to people or AI/ML, who are not committed to the business success of the company. Company executives and board directors have fiduciary responsibilities to place the company at the center of their business thoughts and actions. For this group of people, investing energy into asking "Is there alignment of the company’s mission, purpose, vision, company policies, strategy, and operations?", might be the best foundation to guide business decisions in the face of efforts to chill ESG transparency and good corporate governance.


In fact, maybe #ESGbacklashforgood should be called out! Why? Because it’s sharpening the focus on board directors’ Duty of Oversight. Also, as I shared with the Private Company Directors “It’s a good thing because it is forcing the marrying of ESG to business strategy, and pushing companies into being transparent, being accountable, attaching it to key performance indicators. And the accounting and finance person in me says [that] the less this is about marketing and the more it is about accountability and getting credit for what we do as companies, the better off our companies will be.”


Transparency and accountability are the key here. Transparency and accountability around ESG measures is about companies focusing on growth-oriented business strategies while embedding managing systemic risk. This generates company-level data, which brings brand and reputation credibility with employees, investors, suppliers, and communities where companies operate—current and prospective. ESG is no longer external to companies. Stakeholders are demanding accountability.


Ensuring transparency supports financial valuation and cashflow volatility risk management. Transparency while also referencing business alignment, signals that companies are getting ready today, for future market dynamics. Silence by corporate executives on ESG reflects board director approval of a business strategy where company claims such as “our people are our greatest assets”, may not hold true. The follow-on implied question becomes, what value will company other company assets retain in an M&A transaction?


For fellow directors, this is an opportunity to dial-in on being intentional about accountability for board director Duty of Oversight. Outsourcing this fiduciary Duty to a single “ESG expert" on the board, is low-balling yourself, your board director colleagues, and the company as the increasing uptake of Duty of Oversight cases by Delaware courts may be suggesting.


C-suite executives will be looking to the board, and you, for guidance on how and when to take a stance. Companies will need to continue embedding ESG if they want to continue growth-oriented, financial performance. Business strategies that are sharpened by board directors, and include transparency, are in the #futureisnow zone.


  1. More than ever, businesses are as much factors in the health of their operating environments. What’s different TODAY? The ubiquitousness of the internet, including social media, is here to stay. Water, energy, and people factors are pervasive AND known by consumers, employees, and investors without limits of time, distance, or geographic location. Brand and reputation risk are data driven. Including transparency in corporate governance is a step in taking accountability, for company data.

  2. People are the most important aspect of any business – today and always. As such, the social element of company business cannot be viewed as a separate topic. What’s different TODAY? Product design, development, and marketing require shifting from the assumption that #futureisnow employees, consumers, and investors, will follow past employees, consumers, and investors.

  3. Compliance only companies mostly to characterizes the “Laggards” section of Industry Leading Companies lists. What’s different TODAY? In part, due to the points raised above any company waiting for regulations to invest in alignment-based strategy, with transparency about ESG, creates several risks. Compliance-only business strategies, notably for U.S. companies, may be reducing the competitiveness of U.S financial capital markets because the European Union, other mature market, as well as emerging market financial capital markets are further down the ESG transparency regulation road.



So, how can board directors to increase the risk management level of companies they serve?

  1. Remain aware that oversight into ESG is at the “Enterprise Risk Management” level of fiduciary responsibility and is pivotal to being intentional about Duty of Oversight.

  2. Ask how company policies, strategy, operations (including Finance and Communications), and are aligned around ESG topics.

  3. Ensure data transparency and consistency as risks, are being managed.

  4. Nomination and Governance committees are focused on the people, so ensure employee concerns are being raised, discussed, and addressed in company policy; and, that these simultaneously addresses #futureisnow talent and leadership needs.


Key questions to ask as board directors serving on Nom/Gov, Finance & Audit, and Compensation committees, are shared in this NACD BoardTalk article and reflects a full-board approach to good governance of a #futureisnow company. Women, and African-American/Black and other People of Color, are skilled and poised to transform board director and executive leadership. Now, empowered by data since March 2020, is the moment to lead in a way that inspires improved company risk management that will resonate with employees, investors, and communities—current and future.



About the Author:

Joyce Cacho is an experienced corporate board director, and NACD Leadership Fellow, with

expertise in Finance, Supply-chain, and Manufacturing. Joyce serves as Board Chairperson,

Sistema.Bio, a PE-backed (Series-B-$15M), energy-bio, technology innovating company, with

international operations and sales. In addition to serving the How Women Lead community,

Joyce advises Competent Boards ESG, and Climate & Biodiversity executive and board director training programs; and, serves as faculty to the Diligent Climate Leadership Certificate Program. As a member of the inaugural group of “50 Women to Watch for Boards” across North America, by 50/50 Women on Boards, Joyce inspires business performance through her corporate governance expertise.



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