You may have heard the term ESG bandied around of late like the K Pop song ‘Dynamite’ by BTS at the height of its popularity back in late 2020/early 2021. BTS’s hit transcended countries and cultures previously impervious to K Pop mania. For its part, ESG continues to attract attention as Australia follows international trends towards more ethical and accountable business practices shaped by broader environmental, social and governance priorities beyond balance sheets and shareholder returns.
So, while we all know by now that the ‘E’ in ESG stands for Environment and the ‘S’ for Social, it is the poorer cousin – ‘G’ for Governance – that seems to get the least focus, despite good governance being fundamental to just about everything an organisation does.
Generally, when people talk about the ‘G’, they are talking about corporate systems and policies, stakeholder rights and responsibilities as well as the underpinning corporate culture which makes an organisation work.
Despite its importance, as governance is not identified with any one high profile issue like climate change, it is understandable why the ‘G’ in ESG tends to be overlooked. That’s at best a missed opportunity and at worst a considerable risk, as without good governance, delivering objectives (including the Environmental and Social ESG objectives) is mostly down to luck. At its best, good governance can be an effective business enabler. At its worst, poor governance can lead to dire consequences from which an organisation cannot recover.
You may not be looking to become the next big thing in K Pop, but if you or your organisation is looking to raise the level of good ‘G’ within your organisation, fine tune internal processes, policies or procedures, or just need to get a quantitative and qualitative
read on your organisation’s governance culture and where improvements can be made, then be sure to reach out to the Horizon Point team at www.horizonpoint.com.au/contact-us or via email [email protected]. We are here to help.