Cheerleaders for saving the world

Sustainability reporting seems to be proving more popular than we thought. According to a survey from PwC, of 496 companies around the world, 70% of those polled say it has given them either “moderate” or “significant” value.

That’s a pretty emphatic outcome and seems to fly in the face of US president Donald Trump’s view, droned from a UN lectern this week, that climate transition is “the greatest con job ever perpetrated on the world”.

Fortunately, many corporate leaders around the world seem to have another opinion. Of course, climate is only one part of sustainability but it is, not to put too fine a point on it, a massive part. And it seems facing it—reporting on it—is proving useful for corporates. And maybe, just maybe, they won’t go to hell for that.

AI level imminent

AI is a worry. I mean, every day the question is: “Is it coming for my job?”

Enough of my insecurities; its use is also a concern for board members, who must work out the governance for using AI solutions to transform their operations and strategies.

If that’s a concern for you, the Institute of Directors (IoD) has a new guide for boardrooms. The IoD’s innovation supremo, Erin Young, says: “This paper underscores the strategic imperative for directors to deepen their understanding of AI’s operational and societal impacts, and to embed agility, innovation and continuous learning into governance frameworks.” Better start doing the homework.

Genius ideas

Since the rise of Elon Musk, his stratospheric pay packet and his (insert your own adjectives here) DOGE interlude, academics have been thinking hard about how governance works to shepherd “superstar” CEOs towards a little bit more rational thought. (Alien: Earth offers one answer, if you’re interested).

In the US, as you might expect, some believe the problem is particularly acute. Chen Wang, a governance guiding light at Berkeley School of Law, has some suggestions, one of which includes bolstering board independence by making it clear that members should avoid “capture” by the superstar’s reputation. A method of doing that might be to ensure directors are “confirmed” by minority shareholders (as per a suggestion from Harvard hotshot Lucian Bebchuk).

Another solution might be to include reference to “reputational harm” in fiduciary duties.

Wang writes: “If fiduciary law remains anchored solely in ownership and formal control, it risks irrelevance. Recognizing the market perception of indispensability as a source of power, and developing doctrines to constrain it, is essential.” It’s a brave new world of governance.

Trump: biannual report would be better

Close observers of US governance will have noted the president’s call for the end of quarterly reporting, in favour of twice-yearly events.

To be perfectly honest, this is far from his worst policy idea and, in fact, the issue has been a debate in the governance world since yours truly was hoodwinked into first writing about financial disclosures 25 years ago.

There are arguments both ways. The elongated horizon of biannual events gives directors more time for reflection; quarterly reports offer up transparency.

Financial Times leader writers have a different way of viewing things: “Switching from quarterly earnings could encourage more strategic thinking by removing the three-monthly temptation for companies to ‘beat’ analysts’ expectations. Unfortunately, it is exactly this strategic mindset that the US president lacks.” Good thing the FT leader writers aren’t hosting a prime-time talk show.