The board competency landscape is radically transforming. With stringent regulatory changes and increased stakeholder scrutiny, the cost of non-compliance in sustainability is steep, leading to hefty financial penalties and severe reputation damage. A revealing 2023 study of Fortune 500 companies in Europe and the US exposes a critical gap: many boards alarmingly lack essential sustainability expertise. This stark reality underscores an urgent need for boards to bolster their sustainability acumen or risk falling behind in a rapidly evolving corporate world.
Toronto, January 12, 2024: As the World Economic Forum (WEF) in Davos approaches, Competent Boards has released the latest groundbreaking report, “How Competent is Your Board?” This insightful analysis delves deep into the sustainability competencies of corporate boards, uncovering crucial trends and facts that are shaping the future of corporate governance.
Key Highlights:
1. The assessment involved an extensive analysis of publicly available information on 390 boards of Fortune 500 European companies and 447 boards of Fortune 500 US companies in 2023. This large-scale study provides a robust data set for understanding current trends and competencies in corporate sustainability.
2. A shocking majority of these companies are lagging in sustainability expertise. This is a wake-up call for corporate boards and investors.
- Only 2% of these companies exhibit high levels of sustainability competency on their boards.
- More than 4% of boards in both the US and Europe show no evidence of competence in sustainability whatsoever, highlighting a significant gap in corporate governance.
- Interestingly, despite stricter regulations in Europe, US boards appear to be better equipped to handle sustainability issues.
The assessment tool, developed in partnership with Copenhagen Business School, breaks down how board sustainability competencies are measured. “The metrics focus on roles, experience, and education,” says Helle Bank Jorgensen, Competent Boards’ Founder and CEO, “a board’s readiness to navigate global market demands and regulatory pressures isn’t just about compliance; it’s a strategic advantage that could redefine the company’s future”.
Access the full report here.
Contact
Ayman Chowdhury, Director, Programs and Advisory, Competent Boards
ayman.chowdhury@competentboards.com
Note: Competent Boards CEO and Founder Helle Bank Jorgensen, will be at Davos and available for interviews at hbj@competentboards.com
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