Bass, Berry & Sims attorney Sehrish Siddiqui examined the role that boards of directors should take in effective environmental, social and governance (ESG) oversight and disclosure. As Sehrish points out, “Companies that do not prioritize ESG are at risk of losing large pools of capital, damaging their corporate brand and losing opportunities for long-term growth.”

In the article, Sehrish recommends that a company’s ESG strategy be cross-functional and tied directly to company’s overall business strategy. To accomplish proper ESG oversight, companies may opt to delegate responsibilities across multiple board committees and Sehrish outlines considerations for effective delegation and oversight.

“Regardless of how a board chooses to oversee ESG matters, it is critical that the structure is effective, comprehensive and adequately disclosed to its stakeholders. ESG is no longer a ‘bonus’ or marketing tool, nor is board oversight of the area. ESG should be part of a company’s overall strategy, and boards should prioritize ESG strategy, execution and disclosure,” Sehrish wrote.

The full article, “The Critical Role of Board Oversight of ESG Matters,” was published by Corporate Counsel on March 2 and is available online.

For more information on ESG issues, please listen to the recording of our Corporate & Securities Counsel Public Company Forum.