Women who want to secure a seat on a public or private board today can increase their value by being up on the latest best practices for environmental, social and governance (ESG) topics, according to Ellen Zane, past president and chief executive officer of Tufts Medical Center and Tufts Children’s Hospital and co-program director of the Harvard T.H. Chan School of Public Health’s Women on Boards: Getting On and Adding Value program. She stresses that in the current, increasingly ESG-focused environment, such knowledge can make potential board candidates more competitive to fill a range of corporate and non-profit board position openings.
What Is ESG?
In the simplest terms, ESG provides a framework through which a company can structure its commitment to care for the best interests of the employees, customers, shareholders, communities and other stakeholders it serves or impacts—from taking steps to protect the environment and reduce the company’s carbon footprint to committing to the well-being of customers and the community, to implementing equitable hiring and promotion practices, to managing their company responsibly and ensuring fiduciary responsibility, and much more.
While focusing on ESG is certainly not a new concept, the breadth and depth of companies’ efforts in these areas has dramatically increased in recent years. Efforts are now being measured and tracked, and companies, along with their executives, are being held accountable for progress against commitments made to various stakeholders.
The Growing Role of ESG
“Since many leaders aren’t well versed in every ESG topic, they are increasingly relying on their boards of directors to guide them on how best to accomplish this imperative,” notes Laurie Pascal, Senior Lecturer at Harvard T.H. Chan School of Public Health, and co-program director of the Women on Boards program. From a practical standpoint, this means that women who are up-to-speed in timely ESG topics can be in real demand.
“That concept needs to be on the mind of boards and management when it comes to setting a tone. The idea is that companies can do well and do good. That’s where ESG comes in. The board’s role has traditionally been to have fiduciary responsibility, but ESG greatly expands that definition,” Pascal explains. “You need to be thinking much more broadly about what your company touches in order to be truly successful today. That’s an area where women tend to be able to contribute in a strong way,” she adds.
Exploring the Benefits of ESG
While in the past a company’s focus on ESG was voluntary, Zane says that it’s become an expected part of doing business today. In fact, a growing number of investors are expecting companies to be taking sustainable actions to enhance their value. Thus, shareholders are increasingly requiring companies to report on their actions in the ESG space, and are also seeking to audit companies in order to prove that they are living up to the representations they have made.
Zane points out that a well-diversified board that is up-to-speed on ESG will also be able to come to the table ready to ask some key questions that can guide the company’s ESG operations in an important way. These questions include things like: What are we doing in the communities in which we operate? How are we thinking about the needs of our employees? How do our operations, principles and behaviors effect our customer base? How are we thinking about long-term climate change and at the same time, considering our short-term impact?
The benefits that companies can expect in return when the board asks the right questions and leads ESG operations to their full potential include accelerated growth, reduced costs and increased reputation in the field among employees, customers, investors and regulators.
Expanding Roles for Female Board Members
The good news is that women today have more opportunities than ever before to contribute to the growing ESG conversations and help guide companies to success.
“There have traditionally been fewer opportunities for women than men on boards, but that’s been changing substantially recently,” Pascal says. Now many boards have diversity goals to fill, which includes adequate female representation, and most are specifically looking for those who can bring value to the table. “Women are in demand—especially those who can help companies think about ESG issues,” she adds.
Investors, too, are considering the diversity of board membership as a factor that impacts their interests. They recognize that women bring a value that can increase a company’s overall impact in many ways. This ultimately opens up more opportunities for women—and some of these opportunities are also available to women earlier in their careers than they ever were in the past.
“The premise is that more diverse boards, which also include younger members, are able to look at the changing world in a more holistic way,” Pascal says. For instance, younger board members can be more in touch with what their peers want, and with emerging disciplines and arenas like AI and other technologies, making them a valuable addition to a board in ways that might not have been considered in the past.
“Many boards now also recognize that women from a range of backgrounds and experience levels—not just CEOs and top leaders—can also bring real benefits to the board room,” Zane says. She points out that this means that some boards may be seeking women with relevant niche experience such as an IT manager who oversees cybersecurity; an HR manager with global experience and a background in DEI (diversity, equity and inclusion), which falls within the social portion of ESG; an environmental scientist with expertise on conserving natural resources; or a marketing professional with experience tailoring messaging in a way that responds to current affairs.
Pascal refers to a recent Infosys’s global ESG Radar survey, which shows a direct correlation between women’s involvement on an ESG board and a company’s success. Specifically, the findings reveal that ESG boards who increase female membership experience a small (but potentially significant) increase in their profits. This is just one data point in a growing sea of evidence illustrating the value that women can bring when they serve on a board and utilize their expertise to help lead the company to success in an ESG-focused world.
Harvard T.H. Chan School of Public Health offers Women on Boards: Getting On and Adding Value, an on-site program designed to help women who want to secure a seat on a health care board.
Zane, Ellen, past president and chief executive officer, Tufts Medical Center and Tufts Children’s Hospital, co-program director, Harvard T.H. Chan School of Public Health’s Women on Boards: Getting On and Adding Value. Zoom interview March 2022.
Pascal, Laurie Pascal, Senior Lecturer, Harvard T.H. Chan School of Public Health, co-program director, Harvard T.H. Chan School of Public Health’s Women on Boards: Getting On and Adding Value. Zoom interview March 2022.