Definition of the Topic
Governance is basically how your company is run: how you make decisions and implement them to reach your goals.
What does it include?
Sustainable governance is about accountability and transparency. In other words you have to be open about your impact on people, planet, profit and be accountable for that impact. When making decisions social, economic and environmental aspects should be integrated in decisions regarding strategy, objectives and targets but also in daily operations.
It is about the relation between your company and it’s decision makers. On the one hand it focuses on the formal structures, on the other hand it includes the informal mechanisms linked to the values and culture of a company.
Some concrete activities on how to accomplish this are:
- foster a culture of social responsibility;
- show accountability and involvement of leadership and management;
- stimulate and reward sustainable initiatives and activities;
- promote equal opportunities;
- align capabilities and responsibilities of employees;
- have a (continuous) dialogue with stakeholders;
- identify conflicting interests;
- stimulate participation by employees in CSR initiatives;
- review the organisational governance processes and structure;
- monitor the effects of decisions and their impact on society, environment and economy;
- improve processes and structure if needed.
The governance structure enables you to accept your responsibility and act accordingly, while at the same time respecting the principles of sustainability. Being accountable and transparent also builds trust in you and your company. Furthermore, it’s a way to manage potential risks.
See some best practices for pragmatic examples.