A paradigm shift in the board room: Incorporating sustainability into corporate governance and strategic decision-making using big data and artificial intelligence

Abstract

In this paper, the author discusses the need to elevate sustainability to the scrutiny of the Board. Coronavirus disease-2019 and the lessons learned must nudge corporations to think and act more holistically about sustainability and incorporate sustainability into the fabric of the organisation. Each Board Committee must do its part in ensuring the company adopts a robust framework around sustainability. Equally important to reporting on sustainability issues and measuring and managing sustainability risk, is measuring and analysing a company’s sustainability ‘reputational footprint’. Key Board Committees all need to understand the impact global macro systemic risks can have on the company and the impact the company can have on externalities which can affect its sustainability ‘reputational footprint’. Boards need to ensure that every strategic decision is made through a sustainability lens. Not only will this enhance its societal impact but can be a key driver of performance. A strategic focus on sustainability at the Board level can be a source of competitive advantage. Boards need to measure and understand their sustainability ‘reputational footprint’ and benchmark themselves against their peers. Using big data and artificial intelligence, a corporate Board could integrate sustainability data into its business model and strategic decisions to give it a competitive advantage vs its peers. Boards need to have sufficient fluency in the latest sustainability technology to apply advanced statistical, data-driven information to optimise their sustainability ‘reputational footprint,’ which lowers their cost of capital and improves other financial metrics.