Investors and consumers are increasingly considering an organization’s environmental, social and governance (ESG) strategies when choosing where to invest, where to work or where to buy goods and services. But companies sometimes need additional support in the form of research and training to meet these expectations.
INSEAD’s Center for Corporate Governance, or ICGC, provides this support. INSEAD is a leading not-for-profit business school with its original campus outside of Paris, with additional locations in Singapore, Abu Dhabi and San Francisco.
ICGC works with businesses, nonprofits, and government and educational organizations around the world—and their leaders and boards—to offer research and the expertise of faculty members who have experience in consulting or consulting, webinars and other training materials, and corporate governance certifications.
“We get different requests from organizations and individual board members for specific training solutions,” ICGC executive director Sonia Tatar told Insider. “For example, organizations often contact us for support, advice and partnerships regarding individual or group board-level learning solutions, while individual board members can contact us to inquire about the journey certification of administrators.”
About 70% of directors say they are moderately or not at all effective at integrating ESG into a company’s strategy or governance, according to a survey by ICGC and the Boston Consulting Group. Less than half believe their boards are knowledgeable and experienced enough to challenge a company’s ESG strategies, and many lack the knowledge, data and capacity to conduct ESG oversight. ICGC’s goal is to help companies develop successful governance strategies and drive impact by meeting investor demands and increasing profits, Tatar said.
“We address the latest trends, topics and challenges in corporate governance not only from an academic perspective, but also from a practitioner’s perspective, a practice-based perspective from real-world experience,” said she added.
Here’s an overview of how an effective corporate governance strategy benefits businesses, the challenges organizations face when developing a strategy on their own, and how the ICGC steps in to help.
Helping companies overcome governance challenges to meet investor demand
Boards of directors are the key decision-makers within organizations, representing the backbone of a company’s governance system, Tatar said. It is crucial for companies to have a solid governance framework so that their boards of directors are effective, accountable, resilient and create value for investors and stakeholders.
There is increasing pressure and scrutiny on corporate boards and corporate governance strategies from internal and external stakeholders, Tatar added. According to a report by McKinsey & Co., in 2019, 70% of investor demands on companies related to governance, including board composition, compensation, accountability, voting rights and leadership changes .
Governance is tied to the success or failure of a business since accountability and responsibility are often tied to the organization’s board of directors, she explained.
She said the ICGC helps companies facing challenges such as skills development to broaden a board’s knowledge of new topics such as ESG and digitalization, as well as preparing and l onboarding the next generation of administrators. Family businesses often need help establishing more professional boards for their longevity.
Continuously reviewing governance strategies helps organizations meet these demands and can improve operations, motivate employees, drive innovation and strengthen shareholder relations, according to the McKinsey report.
Provide governance resources and training that drive value
The ICGC works with companies through two models: corporate governance training programs and certifications for aspiring and experienced directors and board chairs. ICGC has a portfolio of training materials, but also develops custom programs tailored to an organization’s needs and goals.
The ICGC is a partner of the European Confederation of Associations of Directors, the Ukrainian Academy of Corporate Governance, the Hellenic Council for Corporate Governance and the Corporate Governance Hub.
To help businesses, ICGC first learns about an organization’s unique needs and determines which program or certification is best for them. Developing a tailored program includes identifying an organization’s challenges, input from INSEAD experts and faculty, and conducting analysis with board members and executives of the business to find out what should be the best results for the business.
ICGC provides access to experts, research, reports, educational content and case studies, as well as board simulations, commentary on leadership styles, coaching executives and global peer-to-peer board exchange programs.
ICGC certifications include the INSEAD Certificate in Corporate Governance for board members who operate internationally. Participants take part in training on strategic management practices and creating financial value and write a document showing how they put what they have learned into practice. An advanced certificate is available for those wishing to deepen their knowledge.
Focusing on governance builds trust and drives growth
A strong governance strategy creates value for companies. According to a 2019 McKinsey & Co. report, it builds strong community and government relationships, prepares organizations for regulatory and government requirements, motivates employees, builds investor confidence, and inspires consumer confidence.
Tatar said it also makes companies better prepared and resilient for the future, so that organizations and boards are “strong forces for improvement” within economic markets and the ESG landscape.
ICGC helps companies ensure boards are made up of the best talent who can bring different perspectives, drive innovation, understand stakeholder expectations, and embrace new trends or regulations that affect them – to short and long term, she said. Companies need only take action, assessing board composition, strengths and weaknesses, and identifying gaps where training, upgrading or changes are needed.
“We help directors stay ahead of the game, which is a catalyst for driving good governance to inspire and propel organizations to have a positive impact,” Tatar said.