Tag Archive: CSR

NACD Staff Gives Back

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This past Friday, October 20, National Association of Corporate Directors (NACD) staff packed up and readied itself for a big move. After five years on Pennsylvania Ave., NACD’s national office relocated across the Potomac River to Arlington, Virginia. NACD staff turned what could have been a stressful moving day into an opportunity to give back to the community that it works in through its first Day of Service.

Packaging food for delivery

Serving hot meals from a mobile food kitchen

President and CEO Peter Gleason championed NACD’s Day of Service as a way to involve staff in volunteer activity and to demonstrate that the organization is dedicated to supporting the lives of others. NACD spent time with several  local nonprofit organizations, including:

  • Martha’s Table, an organization that seeks to provide healthy meal and food programs for children and their families. For over 37 years, Martha’s Table has worked to support children, families, and neighbors by making healthy food and quality learning more accessible.
  • DC Central Kitchen, whose mission is to use food as a tool to strengthen bodies, empower minds, and build communities. This organization provides culinary training for jobless adults and then hires them to prepare 3 million meals annually for homeless shelters, schools, and nonprofits.
  • Capital Area Food Bank, an organization working to solver hunger, chronic malnourishment, heart disease, and obesity. It provides 540,000 people in and around the nation’s Capital access to healthy food annually.
  • Arlington Food Assistance Center, which obtains and distributes groceries directly and free of charge to those in Arlington who cannot afford groceries.
  • Food & Friends, whose vision is to provide meal delivery to people with HIV/AIDS, cancer, and other serious illnesses who have limited ability to provide nourishment for themselves. Their simple premise is that anyone can get sick and everyone can help.

Organizing food for a “market day” at an elementary school

One group of NACD volunteers reported back from Martha’s Table with this experience:

“Our crew of four baked about 230 muffins in one afternoon for our Day of Service assignment. Martha’s Table is a charity that has various aims, including introducing healthy eating to those who might not have access to traditional resources, such as those experiencing homelessness. Their mobile soup kitchen, McKenna’s Wagon, provides meals daily at various locations. The muffins we baked and packaged were destined to go on the truck Friday night as dessert for those that McKenna’s Wagon served. We had a lot of fun baking at Martha’s Table. We had a recipe for apple spice muffins and an aggressive timeline to meet! Everyone pitched in, bonded, and encouraged each other. It was a rewarding experience.”

Baking for a mobile soup kitchen

Do you know a deserving organization in the metropolitan Washington, DC area that could use volunteers in the future? Make your suggestion by leaving us a comment.

Sustainability and Social Responsibility: Considerations and Tools for Boards

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Ashley Marchand Orme

Learning how to implement sustainable business practices can be challenging for companies in any industry, and boards may wonder how to integrate sustainability issues into discussions with management. NACD has compiled a set of resources offering practical information to help boards discuss climate-related risks, as well as opportunities associated with environmentally- and socially-sustainable business practices.

The first step is to assess why sustainability and social responsibility are such hot topics for the boardroom. Two important factors to consider are the political environment and shareholder expectations.

Signals From the Current Administration

President Donald J. Trump in June announced that the United States would be withdrawing from the Paris climate agreement, an international deal in which 191 countries have pledged to work toward goals to restrict the increase in temperatures globally to less than 2.0°C and reduce the amount of greenhouse gases being created.

The president in April also signed an executive order aimed at “promoting energy independence and economic growth,” curtailing federal environmental regulations. The order instructs the Department of the Interior to lift former President Obama’s ban on coal leasing activities on federal land.

Watchdog group Environmental Integrity Project recently reported that this year, the Trump administration, when compared to the prior three presidential administrations in the same period, has collected approximately 60 percent less in fines from companies’ violations of pollution-control regulations.

Opposing Pressure From Shareholders

Despite strong signals from the current administration that enforcement of environmental-related regulations will decrease over time, shareholders are applying an opposing pressure on corporations.

More than half (56%) of shareholder proposals introduced this year on proxy ballots related to social, environmental, or policy issues, and Proxy Monitor reports that this proportion is the highest it has seen since it began tracking such data in 2006.

Shareholder proposals relating to environmental and social issues 10 years ago sought fairly basic changes such as increased clarity into companies’ environmental policies. The proposals now seek, for example, enhanced disclosures around what the company is doing to manage climate risks and how executive pay links to sustainability initiatives, the Wall Street Journal reports.

Proposals about environmental issues received a record breaking average of 27 percent support this year, according to Proxy Monitor. That percentage was 21 percent last year and fell in the teens before that.

Meanwhile, State Street Corp., a global financial services and investment management firm with $2.47 trillion in assets under management, published a report earlier this year in which they found that traditional obstacles (like the lack of quality data about ESG) to investing more heavily in companies that prioritize ESG initiative are diminishing.

“Over the long-term, environmental, social and corporate governance issues can have a material impact on a company’s ability to generate returns,” Ron O’Hanley, president and CEO of State Street Global Advisors, said in a press release.

NACD’s Responses

Given the increasing expectations of shareholders and NACD’s continued focus on long-term value creation—a focus that requires a sustainability-focused mindset—NACD has curated its Resource Center: Sustainability and Social Responsibility.

Resource centers are repositories for NACD content, services, and events related to top-of-mind issues for directors. In these resource centers, individuals can find practical guidance, tools, and analyses on subjects varying from board diversity to cyber-risk oversight. Below we have highlighted a sample of helpful materials from our new resource center on sustainability and social responsibility.

Thought Leadership & Research

The resource center features a handbook called Oversight of Corporate Sustainability Activities—part of the NACD Director’s Handbook Series—that offers guidance aimed at strengthening the board’s oversight of sustainability issues.

The handbook, produced in conjunction with EY, centers around four key recommendations:

  • Directors should understand the company’s definition of sustainability in the context of the company’s strategy and specific circumstances.
  • The board and management should align on the sustainability message and information the company chooses to report publicly.
  • Boards should clarify roles for oversight responsibility for sustainability activities, including external reporting.
  • Directors need to establish parameters for sustainability reporting to the board regarding the information required to support robust discussions with management.

Expert Commentary

A number of items included in the resource center provide expert commentary on myriad issues related to sustainability and social responsibility. A favorite of mine is “Living in a Material World,” an article written by Veena Ramani, program director of the Capital Markets Systems, at sustainability-focused nonprofit Ceres.

Ramani discusses the corporate director’s critical role in engaging with management over which sustainability issues are material for the enterprise. She offers four suggestions for board members who want to address the materiality of certain sustainability risks.

Boardroom Tools & Templates

The resource center houses several tools and templates to assist directors as they oversee sustainability-related risks and opportunities. One such tool is the “Self-Assessment: Is Your Board Sustainability-Ready?” evaluation. Directors can answer a set of questions to gauge their board’s level of engagement—or lack thereof—in sustainability oversight.

Videos and Webinars

The NACD BoardVision—Sustainability Oversight video in the resource center features a candid discussion by EY subject matter experts Brendan LeBlanc and Kellie Huennekens on how investors are engaging with boards around sustainability and social responsibility issues. (A transcript of the video is also available here.)

Conclusion

Our hope is that you find this resource center useful and visit it often. We will continue to update it regularly with new and interesting content. If you would like help finding resources on a specific subject matter, please let us know. We welcome the opportunity to engage with directors on pressing needs and concerns.

The “Orbital” Governance Perspective: An Astronaut’s Lessons From Space

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Few institutions represent American ingenuity and innovation more clearly than its space program. With rapt attention, the world watched July 20, 1969, as Mission Commander Neil Armstrong of NASA’s Apollo 11 spacecraft became the first person to walk on the moon.

Ron Garan at NACD Summit

Ron Garan—retired astronaut and chief pilot for commercial space launch provider World View Enterprises Inc.—was one of those who watched. “My most vivid childhood memory was July 20, 1969,” Garan said. “On some level, I realized that we had just become a different species. A species no longer limited to our planet.”

Garan delivered the opening keynote address to an audience of more than 1,300 on Sunday evening in Washington, D.C., at NACD’s Global Board Leaders’ Summit, the world’s largest gathering for corporate directors.

Beyond Limitations

Four decades later, Garan’s childhood dream became reality. He had trained with NASA to become an astronaut himself. “That first day in space when I got to take a look at our planet, [I] was absolutely breathless.…What I felt was an incredible sense of gratitude. Being physically detached from the world made me feel closer to the people on it—more interconnected.”

Reflecting on his second space mission, Garan remembers similar feelings of gratitude, but that gratitude was coupled this time with internal struggle. The technological advances that make space flight not just possible but routine offer the potential to solve some of the world’s biggest problems. Yet, Garan pointed out, some people on this planet still do not have access to basic resources like clean water.

“These days we’re more connected than ever, and the Internet is the backbone,” said Garan.  “The Internet can be our nerve center, enabling us to solve problems in an entirely different way.”

Collaboration

Garan further explored that challenge in his third mission, when the seeds to a solution began to root. The answer? Collaboration. On this space mission, Garan was weightlessly floating about 100 feet over the International Space Station, attached to the craft’s large robotic arm. That station represents the collaborative innovation of 15 nations—including the United States, Canada, Japan, the Russian Federation, and 11 European nations—that have, at times, been at odds with each other politically and ideologically.

“What would it look like for us to have that kind of collaboration here on the [Earth’s] surface?” Garan asked. “Collaboration doesn’t mean we agree on everything. What it does mean is that we find the things we do agree on so we have a platform to work [from in order] to address the things we don’t agree on.”

Risk: Necessary for Innovation

But innovation and collaboration don’t come without risk. As a highly decorated fighter pilot, Garan had run several missions and trainings in which he’d successfully flown and had no mechanical problems in flight. Then one day, while piloting a jet during a routine takeoff, he heard a loud pop that jolted him. He very quickly realized his engines no longer had any usable thrust. Garan tried to land in a wooded area and quickly realized that he had no need to be in the jet at that point. Seconds before impact, he ejected and his life was spared.

That incident, though life-threatening, did not change Garan’s outlook on life or risk. But the very next day, he was in flight and, because of a mechanical malfunction, had to conduct an emergency landing. After having completed thousands of flights, he’d had emergencies two days in a row. The second day is when the idea of what it means to take risks sunk in.

Before ever entering a plane or spacecraft, one must decide if doing so is worth the risk. The same is true for business leaders who want to innovate and collaborate. When NASA is planning a mission, they consider every possible issue that could go wrong and develop a response plan that’s ready and waiting to be activated. Boards should do the same. Similarly, a great idea on the shelf can only provide value if it’s activated. “Ideas are overrated. There’s got to be a streamlined path to action,” Garan shared.

“Any change involves some level of risk,” Garan said. “Any innovative business strategy must involve risk. Collaboration can help mitigate risk and also provide an engine for growth.”

Implications for Businesses

It’s important for businesses to understand that we don’t live on a globe; globes are just abstract lines on a map, Garan shared. We too often think of the world in terms of it being about business and economy supporting a society that sustains a planet, he said. “Instead, we live on a planet that sustains a society that has built an economy.” Understanding that concept is adopting what Garan calls an “orbital” view.

It’s time that enterprises realized that it’s good business to care about issues like sustainability and corporate social responsibility (CSR)—beyond just doing it to boost a brand or reputation, Garan shared. Issues like CSR should be part of a company’s DNA now, not just for future generations, he added.

The retired astronaut described how, on his last space mission, his spacecraft entered back into the Earth’s atmosphere and landed on its side. “Now out of my window, I saw a rock, a flower, and a blade of grass. I was home. In Kazakhstan, nonetheless,” he said. “I wasn’t in Houston, where my family was. But I was home and had a different idea of home.”

Thinking of the planet as “home” may be what’s required to actually make one small step for directors and one giant leap for corporate governance.