From January 2021, it will become the board’s responsibility to become involved in the company’s purpose (what the company does besides earning money for shareholders) and in ensuring alignment between the purpose and the company culture and values. The board will also become responsible for ensuring all decisions are made with sustainability in mind. These changes to the guidelines are the result of too many examples of companies where purpose and social responsibility have “looked nice on paper” but have not been practiced down through the organization.
“The whole mindset around sustainability and purpose is now not just an internal matter, but also aimed at the external stakeholders. This helps both recruiting and retention of the most skilled employees…” says Nina Nærby. “Many C25 companies have not had a very clear or relevant purpose, while companies such as Lundbeck, Rockwool and Chr. Hansen have held purpose as a guiding star for many years.”
Nina Nærby is also satisfied that the Danish Committee for Good Corporate Governance has tightened the recommendations on board evaluation, making it more explicit that there should be an external evaluation of each individual board member at least every third year. This makes each member’s value creation on the board more visible. Read more in the article here: