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Cambridge Institute for Sustainability Leadership


From Larry Fink’s demands for performance that delivers for both investors and society, to the new Taskforces on Nature- and Inequality-Related Finance Disclosures, to mandatory climate disclosure requirements by stock exchanges, legislative changes and national guidance to enable purpose-driven companies, the signals are clear: the future of boards will not only encompass effective management of social and environmental risks and impacts, but also the leadership of organisations to ensure they are innovatively focused on creating long term value for society as well as investors.

Internationally, there has been rapid progress over recent months to encode best practice governance: governance that has purpose at its core. As part of this trend, we see ongoing evolution of corporate governance codes and interpretations of fiduciary responsibility. These represent seismic shifts in how we think about organisations and the role of boards. What we are observing is nothing short of transformational.

A need for informed debate and greater rigour in understanding individual, organisational and systemic barriers to progress

In spite of this steady direction of travel, the purpose of business and the imperative for business action to secure social and environmental foundations remain contested by those who perceive that creation of shareholder value should remain the ultimate goal of a business, and that a direct focus on addressing society’s needs risks eroding business efficiency and – ultimately - financial value. There is a need for greater rigour and informed debate, which situates discussion of purpose and ESG factors within a wider focus on achieving thriving societies over the longer-term – along with thriving economies and businesses that serve them.

As well as a need for informed discourse, there is a need to provide organisations and their boards with insight and solutions to address the barriers they face as they work to align purpose and profit. At the level of individual directors, there are challenges relating to their expectations, competency, agency, diversity, and personal agendas and ambitions. Organisational challenges include misalignments between commercial, environmental, and social ambitions (with the achievement of the former often at the expense of the latter), as well as lack of meaningful integration of sustainability factors into how boards run themselves. Many businesses with a stated purpose aligned to society’s wellbeing often lack a clear roadmap to transform both the ‘hardware’ (metrics, incentives, policies, decision-tools) and ‘software’ (culture, narratives, capabilities, leadership behaviours) of the business to enable them to sustainably and profitably deliver on this ambition. Even progressive organisations with a competent and aligned board and appropriately structured organisation face significant systemic challenges; from demand for short term commercial performance even where this erodes long term value, to a lagging regulatory context, inadequate data and metrics and significant technology gaps.  Swimming up-stream will be the norm until wholescale change is well underway.

Bridging the gap

We, like many others, believe that there has been inadequate attention paid to date to the barriers to board performance that is fit for the future. To achieve this, we need to understand the enabling conditions and approaches that are most likely to accelerate improved performance. Our global reach and perspective allow us to radically move forward on this vital agenda to assess the speed of change, internationally, and the tools boards can use to transform.  A new, two-year collaboration between the University of Cambridge Institute for Sustainability Leadership (CISL) and DLA Piper will seek to bridge this gap, bringing increased insight and rigour to mapping barriers as well as to identifying the most promising solutions and enablers of progress. Combining a review of existing academic and practitioner research with consultations with board directors and key stakeholders in a range of jurisdictions.

The initiative will result in practical, evidence-based, internationally relevant insights and recommendations, designed to support boards and the business they lead. It will focus broadly on the future of boards, considering how boards can lead the necessary transformation to align their purpose, commercial strategy and response to global challenges with the achievement of a thriving future for all.

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