Governance: Institutionalizing Sustainability – Xing Kelly Chen

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From the course by Università Bocconi

Corporate Sustainability. Understanding and Seizing the Strategic Opportunity

44 ratings

Università Bocconi

Corporate Sustainability. Understanding and Seizing the Strategic Opportunity

44 ratings

The achievement of a balanced economic, social and environmental development - as expressed in the UN Agenda 2030 for Sustainable Development - is recognized as one of the major challenges humanity is facing today. What is less clear is whether and how organizations can generate business opportunities and value for their stakeholders while tackling such challenges. In this course, thought leaders in a wide variety of management and economics fields illustrate how to assess and seize the opportunities offered by these global emergencies. They will offer new ways to understand the purpose and the logic of success of the business enterprise in this new context, providing ideas and examples on how to manage the transition process to realize the value creation potential from corporate sustainability for all involved stakeholders. Learning objectives The course will allow you to: - Understand What the macroeconomic and microeconomic consequences of both climate changes, poverty, hunger, gender or race discriminations, lack of communication between the State, Civil Societies, and businesses, etc are. - Understand Why it is important for businesses to tackle sustainability issues in order to create more and better business opportunities; - Learn How each individual, organization and system can start to analyze its behaviors and change towards more sustainable practices and models.

From the lesson

Seizing the Strategic Opportunity: Managing Sustainability Transitions across Business Functions

In this module, you will learn to assess the challenges related to the management of the integration of sustainability-related processes in business organizations. This transformational change challenge is assessed across some of the key business functions and will allow you to frame and address similar challenges and opportunities within your own business context.

How to Manage the Transition towards Sustainable Enterprise – Maurizio Zollo13:16

Integrating Sustainability in Corporate Strategy – Maurizio Zollo10:48

Sustainable Corporate Growth Strategies – Maurizio Zollo12:42

Governance: Institutionalizing Sustainability – Xing Kelly Chen5:32

Accounting and Controlling – Ariela Caglio6:36

Supply Chain: Main Problems – MJ. Ni. ilknur Tekin3:32

Supply Chain Focus Pills: Risks in Fashion Supply Chain – Iolanda D’Amato1:42

Supply Chain Case: the YKK Group Case – Iolanda D'Amato15:18

HR Strategy and Management – Silvia Bagdadli5:37

Sales & Marketing – Armando Cirrincione5:20

R&D Innovation: a Framework – Nicoletta Corrocher8:25

R&D Innovation: Technological Change and Innovation – MJ. Ni. ilknur Tekin3:53

Meet the Instructors

Maurizio Zollo
Dean’s Chaired Professor in Strategy and Sustainability
Management and Technology Department

In this video I would like to use Nike

as an example to illustrate how companies can institutionalize their commitment towards corporate social responsibility

through the change of corporate governance. First, I would like to give you some background about this company. So, Nike

is the largest athletic footwear

and apparel company. It can be traced back to 1964 when Bill Bowerman

and Phil Knight founded a business to sell shoes that are manufactured in some low-cost markets.

So, in the 1980s,

Nike was listed on Nasdaq with their two-class share structure under which the chairman

and CEO Phil Knight owns 42 percent of this company. So in the 1990s, the company faced a huge

problem because of many criticisms over the company's

labor issues and contract factories in some emerging markets. As the criticisms heated up, the founder

and board chairman, Knight,

realized the importance of the problem, so he turned to Jill Ker Conway for help. Conway is the first female

director on Nike’s board. She was the former president of Smith College. The reason she was invited to Nike’s board

is because of her expertise in women's issues

and her understanding of students’ perspectives. So, to understand the situation faced by Nike, Conway visited some contract

factories in South East Asia.

She and her colleagues developed some partnership to conduct tens of thousands of interviews in the contract factories to engage

the board of directors in corporate social responsibility issues. Conway proposed to establish a board level corporate

responsibility committee. So, the board chairman Knight endorsed this idea

and asked Conway to chair this committee. She accepted this offer on the condition that Knight must attend every meeting.

So after this committee is established, the committee members have multiple responsibilities. First, they need to oversee

the public reportings on corporate responsibility

and sustainability issues. They need to oversee whether the company achieves their sustainability targets.

In addition, they try to come up with innovative solutions to make the manufacturing process safer

and innovative. The corporate responsibility committee has interactions with other committees

and directors to have the full board understand corporate social responsibility issues. As time goes by, this committee

is getting more and more involved

in the core functions of the company, as top executives are expected to report, to meet with

the committee, explaining how their business strategies are integrated

and aligned with Nike’s sustainability strategy. So in an interview of Conway, she was asked what makes this

corporate responsibility committee successful? She shared that an important key to success is board room culture.

With a learning culture, the executives and directors are willing to share their ideas, suggestions,

and they are passionate for innovation. With efforts of the board of directors, executives, employees

and other stakeholders, Nike has successfully transformed into a pioneer in using CSR

issues as a catalyst for innovation. Then what can we learn from this case? First, establishing a board level corporate

responsibility committee is a good practice to engage the board of directors in CSR issues.

Second, it may not be enough to establish a committee alone.

It is important to have support from shareholders

and executives to make sure that this committee is not isolated

and really functions. In addition to board level corporate responsibility committees, actually there are other governance

practices and mechanisms that can be used to integrate CSR

issues in managerial decision making.

For example, companies may invite directors representing a different stakeholder group or stakeholders’

interests. And also, companies can build a linkage between executive compensation and social

and environmental metrics so that executives have incentives to make decisions and to consider

CSR issues when making decisions.

So the key message for this video is that corporate governance plays an important role in translating

discussions of CSRs into serious changes in firm decision-making.

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