After surviving through a pandemic, to judge and evaluate any organisation, we need to look at its ESG – environmental, social and governance – behaviour, today. In fact, the ‘E’ and the ‘S’ in the equation have always been talked about. However, in last one year, since the onset of the current pandemic, it is becoming overwhelmingly necessary to rediscover and discuss the ‘G’ factor. And, so far, to that extent, the ‘G’ factor of the organisations remained hidden in the layers of corporate intrigue and miasma.
Bad Boy Billionaires: India – the likes of Mallya, Nirav Modi and Mehul Choksi, would not have happened, if the ‘G’ in the ‘ESG’ of those companies have been appropriately strong. It is easy to see how the ‘E’ and the ‘S’ directly impact people, organisation, and the society we deal with and live in, daily. And those are been hyped by one and all, from developmental organisations, civil society to governments. They are perceived to be seen as ‘cool’ and exciting. While the ‘G’ – governance part is often seen as boring, unexciting, and steeped in regulations with convoluted names such as ‘Sarbanes-Oxley’ and considered just as a ‘routine tick-box’ in the factor of compliance.
Governance allows us to exist, create and prosper. Without governance it would always be anarchy, chaos, and malpractice. The ‘G’ in ‘ESG’ has been attracting more attention of late, since the onset of the current unprecedented pandemic, with the argument being that companies with strong governance principles are easier to trust, consequently they attract more capital as they seek to weather the catastrophe and help mankind to transcend it.
Consider this example – with strong governance – appropriate checks and balances – the virus, in all probability, would not have escaped the lab. One more example, with strong governance the organisations will not rush the approval process of a vaccine by endangering millions of lives just to gain market share, profit, as well as favours of the related governments. And, the governments, whose primary job is to govern, would not deliberately rush to cater to their vote-bank, constituencies.
And it is certainly true, however, having strong corporate governance is also the right thing for businesses to do and provides stakeholders with much greater assurances that the company is being run on sound principles.
Okay we get it. Governance is important. But why should it be a focus for communication experts?
Governance relates to how a company organises itself for the interests of its shareholders. And the primary job of a communications expert is to increase value for shareholders, value of the stock and valuation of the company. It also the job of the communications expert to create the thought leadership profile of its Board and the ‘C-Suite’ and how they manage their roles ethically to increase shareholders value.
Say in the case of introduction of Covid19 vaccine – which company to trust? Whose governance process is so strong that they would not short-circuit the testing and approval process? Is the government trustworthy or just playing to the gallery?
As ethical investing and sustainable financing gain focus thanks to a generational change taking place in our thinking, it has become clearer now that there is a premium a company can gain by doing the right thing and being able to demonstrate and be held accountable to the ESG goals.
And the role of the communications leader is to see that it is happening, with special emphasis to the G -factor.
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