Environmental Social Governance or 'ESG' as it's known in the legal world is not in alphabetical order in our view. We think Governance is most important. That doesn’t mean we don’t care about E or the S however... Please don’t cancel us, just yet, but read on.
Environmental Social Governance or 'ESG' with my rapier-sharp mind, I’ve worked out is not in alphabetical order. Someone, somewhere, the person who created the rebranded CSR 2.0 A*** with sugar on top, put it in order, I am guessing in what they thought was the right order - of importance.
Alphabetically of course, EGS could be the subject of much high jinx and japery on Roll on Friday and that just wouldn’t do.
However we would like to propose that GES or GSE is more sensible – although we should probably carry out a trade mark search before speaking too loudly.
We think Governance is most important. There we’ve said it. It doesn’t mean we don’t care about E or the S. Please don’t cancel us, just yet, but read on.
Our killer point is: start with Governance. Without proper Governance there is no E or S for the modern CEO’s to espouse.
Lustrum believes that good and genuine environmental and genuine social stewardship should be sought from and provided by organisations. Lustrum exists to make the World a better place after all. Genuinely we do – we’re not espousing - our World is that of the in-house lawyer and we want to make that World better so that the good people that inhabit that World can flourish and thrive and the bad people (you know who you are), don’t.
Without good Governance, there will be no platform from which to espouse at all or at best a morally flimsy one. Ask those CEO’s at Post Office, Lehman Bros and. Volkswagen, Top Shop and Patisserie Valerie, Kids Company……we could go on…..(but it’s almost too easy to go on unfortunately), whether or not they should have sat up, listened and not looked out the window when their General Counsel was doing the Corporate Governance training.
Espousing makes us wince a bit, well quite a lot these days, but we can see why CEO’s do it. More on that another time perhaps.
We’re learning more about business ethics and E and S and G every day and how to help organisations get better at it. Lustrum will never stop learning and evolving our thinking and we always strive to get better at what we do.
Our view is that ethics and environmental and social stewardship should be integral part of good Governance already, along with:
The list doesn’t end, perhaps it never does as new Governance horrors rear their ugly heads regularly, but the clear point is that there is a lot to go at to get good at Governance.
We might not know where it ends, but we do know where it starts. It starts with Leadership. Mature leadership. Good Leadership, that very rare thing…..we really will come back to that another time.
Leaders role model the right behaviours, they are the appointed custodians of the organisation for the stakeholders and the exemplars of the organisation culture. That’s the theory. That’s what they espouse.
Organisational Governance is meaningful, important, virtuous. CEO’s should take it seriously and embrace it wholeheartedly as it underpins everything the organisation does. It starts with mature leadership and role modelling the right behaviours and being intolerant of the wrong behaviours. Done well it’s also a huge differentiator and contributes significantly to a sustainable, organisation, that creates long term value for the stakeholders, shareholders and the community at large.
Our view, our strongly held view, is that Good Governance™ (let me trademark that now), should be the priority focus for all organisations. Once Governance is good, organisations can do good things and be successful and create good experiences for their employees, customers and good returns for their investors or other stakeholders. Organisations can then do more E and more S.
Organisational Governance is meaningful, important, virtuous. CEO’s should take it seriously and embrace it wholeheartedly as it underpins everything the organisation does.
Get Governance right and good and you have every chance of developing a successful, enduring organisation and one that you can be proud to espouse about.
The good news for you, is that Lustrum Partners is here to help, we have years and years of experience of working in-house and at every level, to make your organisations better through better lawyering and Good Governance™.
We’re going to leave you with a pressure sales technique that we know will work.
Start today before it’s too late.
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