Opinion: Why Building an ESG-effective Boardroom is Vital to Success

Governance, which is an often-overlooked aspect of ESG, is the most important of the trifecta, writes Emily Easley, CEO of NOVUS Energy Advisors.

Companies that do not disclose details of their supervision of ESG risks and opportunities have the lowest ESG scores. (Source: Sharomka/Shutterstock.com)

Early in my career, I had the opportunity to participate in our organization’s board of directors meetings, which comprised 12 members from the electric utility and solar energy industries. This was during the 2000s when solar penetration into the market had started to disrupt the electric-power utility model, with customers now requesting changes to the way they procured power. 

As a young associate, it was a fascinating time to see how the various members of the board navigated through what were often contentious and passionate debates. Our board was not just diverse by gender and race, but also by perspective—an often overlooked component of diversity—that surely sprang from differences in geography and plain ol’ technical know-how. After all, the experience of an executive from a regulated electric investor-owned utility is very different from one whose career has been spent in solar power. 

These diverse perspectives had a meaningful impact on the company’s bottom line, with exponential growth occurring year after year. The discussions might have been fiery, but the results spoke for themselves. Diversity in perspective—in thought and experience—worked. 

I’m reminded often about something a mentor once told me. “It takes a team,” he said. “A contributing, involved board and an exemplary executive management team.” No one on a team does the exact same thing as anyone else. Likewise, boards should be made up of members whose perspective and purpose varies greatly.  

As ESG has become more mainstream, the “G,” which stands for governance, is often the area we focus on the least. Governance is seen as boring, mechanical and something that is beneath the great big ideas behind environmental activism and social change. But, I argue, the G is the most important of the trifecta.

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