What training do you need in order to be an effective Board member? Can you get by on the skills you have built and experience gained as you have moved upwards through organisations? Is there a case for enhancing some of those skills, such as communication or decision making, in order to boost your ability to contribute to the Board collective?

Whatever your answer it’s a fair bet that many of those skills and attributes you have developed on your journey have been inward looking; honed for the benefit of your immediate organisation. But in recent years there has been a new kid on the block, one which requires organisations to turn their face outwards and to consider far more than the profit/customer/ shareholder mix. I’m talking here about Environmental, Social, and Governance challenges; ESG for short.

Admittedly some of the social and governance elements may well have been covered along the journey towards leadership. For example, social factors such as customer satisfaction, diversity and inclusion, or employee wellbeing are hopefully intrinsic elements of every company culture. And as future leaders move through the management ranks, these social factors will help to lead towards a broader appreciation of governance, emphasising the need to act in the best interests of the organisation and providing the tools to enable individuals to do so.

Considering environmental impact

But what about the environmental element of ESG? Depending on the business sector, the organisation’s environmental impact may well be outside the remit of the majority of those within the organisation. Realistically how many people stop to consider the environmental impact of their decisions and processes on a day to day basis? Climate change may have been at the head of the agenda at the June 2021 G7 summit in Cornwall, but is it at the top of our own agenda when we print another copy of that paper, order supplies or review processes? The same goes for considerations of waste management, biodiversity or sustainability.

And yet, Board members are expected to incorporate these areas into their thinking as part of an ESG remit. That responsibility may well require training in a wide range of areas, perhaps starting with awareness training which helps individuals to look outside the confines of their own job/ task/role/ organisation at the potential impact of decisions or actions.

In truth, this is training which shouldn’t start at Board level. Good boardroom succession planning isn’t simply a matter of picking the right individuals, it also requires providing the right training so that individuals across the organisation can grow and develop towards leadership. As the Financial Reporting Council (FRC) commented in a recent paper on ESG [1], “– better internal information leads to better decisions and better insight for stakeholders.” The sooner people are trained on all aspects of ESG awareness, the better the information flow across the organisation and potentially the better impact the organisation can have in wider society.

[1]https://www.frc.org.uk/news/july-2021/frc-outline-necessary-action-for-effective-esg-rep