Question

How will corporate governance issues address sustainability?

1- Is good corporate governance could address the societal influence aspect of sustainability.

2- Is good corporate governance could address the environmental impact aspect of sustainability.

3- Is good corporate governance could address the finance aspect of sustainability?

Answer 1

The mission , vision and operating policies of a company definitely address the sustainability aspect. A sustainable company will have the corporate governance in place which will help the company to address the social , environmental and financial aspects of sustainability.

1. Good corporate governance can address the societal influence aspect . A company having an operating policy that involve maintaining good employee relations, providing required health care and retirement benefits to its employees , having congenial work atmosphere and having employee friendly leave policies will definitely be sustainable from social angle. Companies giving back a part of its profit in the form of various social benefit schemes as part of Corporate social Responsibility programs are definitely making a foundation for social sustainability where the company is working towards a flourishing society. A good corporate governance also ensures that a whistle-blower policy is in place so that any act against the interest of the company can be raised without fear , that ensures social sustainability as well.

2. A good Corporate governance can address the environmental aspects of sustainability . The environmental policy of a company determines how the products and operations will impact the environment. If the environmental policy of a company ensures that its raw materials, products , by- products will not pollute the environment , the effluents of its operations will be treated before being discharged to environment, if the company policy ensures that it will be water positive, if the company has targeted reduction of carbon reduction activity , then definitely such companies are working in favor of environmental sustainability. Such policies are part of corporate governance of the company and goes a long way in ensuring the environmental sustainability.

3. The corporate governance policy of a company ensure the financial sustainability of a company. The corporate governance process includes policies that ensures Govt taxes and duties are paid in due time, the due process for raising capitals are followed, the dues from banks and financial institutions are timely honored, the required disclosure to the stock exchange are made as per law and the employees get the financial dues in time and the vendors get payments in time. Good corporate governance also ensures good internal controls, good planning and performance measurement systems that ensures that the company remain profitable, invest in good projects , enhance its sales and earnings and continue to increase shareholders' wealth . All such policies as part of corporate governance ensure that the company is financially sustainable for a long term.