For successful implementation of Environmental, Social, and Governance (ESG) standards, at times, quarterly gains can take a back seat. And here the board has to take the stand and support the management in taking tough ESG-related decisions. In the latest edition of ‘Grow with Governance’, Managing Director, South Asia for REHAU Polymers, Bhavana Bindra talks to Free Press Journal’s Jescilia K and MentorMyBoard’s Neha Shah about ESG and how board members can play a more empowering role. In addition, Bindra, who is an Independent Director on the Boards of several public companies, shares her view on the role of the board to encourage diversity in the workforce.
Tell us about your board journey
Getting on a board has been an aspiration due to the learning and network it would help me with. Moreover, it was also about the value I would bring to other organisations, besides the organisation, I am full-time associated with.
Several years ago, I asked a Senior Director, ‘what it takes to join a board?’. It was a unique experience as it was a discouraging one. As I created a mark in the industry, I was invited to boards and the rest is history.
It has been a continuous learning process. It is not about the role that you play but the association/ partnership and accountability factor.
The journey will continue to be a learning process mostly due to colleagues on boards that I sit on and also due to the ethos of organisations I have chosen to be a board member of. There is a lot of opportunity in case of improvement and growth perspective.
Have you been able to seamlessly use any learning from one organisation to another?
Contributing at the board level is not limited to what a board member does at a board meeting, but it is also about what you do beyond that meeting.
Independent Directors (IDs) try to get involved beyond board meetings. This is about understanding the business and ensuring you bring in learnings.
For instance, the discussion around gender diversity has been part of many board discussions. But there is so much learning one can bring in or learn from another board member on this topic. One cannot say that the task is done by just discussing it at the board level. There is a need to track its progress as well.
At times, partners or small businesses that large corporations associate with end up sidelining governance. How can boards help in this context?
Governance is a framework, if you operate within this framework some things are very smooth. In the end, today businesses understand that there is a certain comfort one can draw due to these existing frameworks. In addition, one can operate without worrying.
The question today for businesses is: how agile are they for change.
How has the growing focus on ESG changed the way boards function?
ESG is adding more elements. So that businesses take accountability and responsibility for their activities.
Many times, we get bogged down by the term ‘Quarter’. There are many boards that are adept -- they look at ESG from the future strategy perspective. ESG is forward-looking. At times, gains will not be obvious.
At the managerial level, the key performance indicators (KPIs) is not about the future plans or topics that cannot be easily measured. Thus, it becomes imperative at the senior managerial level and at the board level to be looking into ESG-related areas.
The ecosystem has become more sensitive because we know more and understand more. This is something that we have to keep in mind.
Today, investors are looking at investing in organisations that are much more sensitive across these areas. It is a matter of time when the industry starts moving as a whole (towards embracing ESG).
The sooner we start, the more conscious we are. The more we drive it, the more we allow the management to spend their energy to make it their mandate.
How can the board keep track?
While some part of ESG is measurable, some are not very easy to measure. From the board perspective, it is about getting the discussion to the table. ESG discussions do not even reach the board. Some ESGs are part of bigger agenda in some industries. But that is not the case in every industry. In that case, ESG has to be brought to the table by the board.
What has been the impact of COVID in the decisions that are taken in and around ESG?
The impact of COVID is still being figured out. At present, it is more or less like we are happy when demands increase, we are happy that the third wave has not hit us, and so on.
ESG or otherwise, COVID has made us more flexible and agile. At present, we are at a point where we know anything is possible. As a board, we have to ensure that we have empowered the management as well. We also have to ensure that we (Directors) are available as and when the management needs us in case of quick movements and decisions.
COVID was one more impetus on some of those areas.
Today boards have women directors. But at the executive level, gender diversity is still skewed. How can the board help improve gender diversity?
The question is how often we bring this discussion on to the board. First, the board needs to support the baby steps taken by the organisation. Secondly, it is about taking the dialogue beyond diversity and going into the realm of inclusion.