The third key dimension of ESG – governance – encompasses many aspects, but at its heart can perhaps be viewed as a question of leadership. Stakeholders from investors to regulators, and from NGOs to consumers, expect businesses to demonstrate integrity, social responsibility, fairness and strong ethics.
Ultimately, it is the CEO as the leader of a business who must ensure that this is the case. Research has found that more than 8 out of 10 global consumers expect CEOs to lead on societal issues, for example.
Stakeholders – and especially investors – are also demanding accountability and transparency on financial exposure to risk and opportunities connected to environment/climate change, corporate governance, and fiduciary duties related to human capital.
Life science companies – like all others – must prove their ‘license to operate’ through strong governance processes across issues such as:
Employment practices
Equal pay
Treatment of suppliers
Human slavery
Anti-bribery & corruption
Anti-money laundering
Aligned with World Economic Forum (WEF) and UN Sustainable Development Goals (SDGs), at the forefront of executive decision making and leadership strategy should be the development of a framework to help the life science sector respond.Perhaps more important than anything is the development, led by the CEO and executive team, of a compelling purpose and set of values that can inform every aspect of how the organisation operates.
