CHAPTER 16

Governance—The Rationale

Why Governance Is Different

Earlier in this book, we noted that governance is probably the most difficult aspect of ESG to get to grips with. Today, boards and their directors are under increased scrutiny. In terms of ESG, there may be a temptation to resist the sort of scrutiny that ESG reportage implies; if the board resists, however, investors may—in any case—insist on greater transparency and accountability. It is a truism that incompetent boards and directors command reduced public sympathy, and corporate governance qualifications are increasingly required of directors1, which is no bad thing! Good governance has a positive impact on society and the planet. Poor governance can lead to negative outcomes ...

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