TheCorporateCounsel.net

According to a recent BDO survey of nearly 250 public company directors, 57% said that oversight of ESG matters falls to the Nominating and Governance Committee, while only 13% of directors surveyed said that their companies have a separate ESG Committee. This excerpt indicates that when it comes to having a standing ESG Committee, size matters – and that other standing board committees often find ESG issues ending up on their plate:

In 2021, more than one-third of directors (35%) said they planned to create an ESG-specific committee during the next three years. As of now, just 13% indicated they have done so. Boards with smaller market capitalization (81% of our survey respondents sit on at least one board with small or micro-sized stock shares) may not have the resources or incentives to create a separate ESG committee. By comparison, approximately 31% of the S&P 100 have a separate ESG committee of the board.

Whether or not a dedicated ESG committee exists, ESG factors touch various committees across the board. For example, we increasingly see the compensation committee getting involved in many more human capital matters beyond compensation packages for the CEO and executive team. In many cases, we see boards changing the names of their committees to reflect the expanding duties to consider employee needs more broadly.

– John Jenkins