Giving Compass' Take:
- Here are five questions that boards should consider when thinking about or prioritizing ESG strategies for companies.
- How can boards guidance help strengthen a company's social impact mission?
- Read why we need ESG and impact investing.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
Preparing for an initial public offering (IPO) has never been easy. The stakes are enormous, and the process requires significant investments in time and resources.
But in recent years, the path to a successful IPO has become even more complex. The financial community, investors and other stakeholders no longer rely solely on financial metrics and market potential to determine the viability of a potential IPO. Increasingly, a company’s commitment to operating in a responsible and sustainable manner is just as important to its attractiveness as and engine of profit and growth.
This movement is called stakeholder capitalism — the belief that companies should meet the needs of all stakeholders, rather than just shareholders. The underlying premise is that companies that prioritize environmental, social and governance (ESG) matters along with financial strength deliver improved value over time.
The responsibility for developing ESG objectives prior to the IPO and managing implementation, measurement, and reporting thereafter falls on senior leadership. But the board should take an active role by asking the right questions and setting the expectation that ESG is a critical piece of the company’s go-to-market strategy.
To help your company’s leadership team properly embed ESG principles and plans into their pre- and post-IPO strategies, board members should be asking the following five questions:
- What is the company’s overarching purpose and how does that link to long-term value creation?
- What are the primary ESG issues we should consider?
- Do we understand how our stakeholders view ESG?
- How will ESG be measured and monitored over time?
- How will we demonstrate our ESG performance?
Read the full article about ESG board planning by Rachel Gerring at GreenBiz.