Seven best practices for boards of directors

The integration of ESG criteria has become a key issue for members of boards of directors, who must ensure that organisations act responsibly and remain relevant and competitive. Here are a few examples of good practice from Philipp von Restorff, CEO of the Institut Luxembourgeois des Administrateurs (ILA).

Systematic evaluation of boards and directors

It is becoming increasingly common to assess the level of knowledge and skills of directors and the board as a whole, including on ESG issues and the company’s sustainable strategy. This assessment helps, amongst other things, to identify additional profiles that may be useful.

Diversity in the composition of the board of directors

An effective board of directors is one that is often diverse in terms of gender, education, skills, experience and culture. There is a growing demand for an ESG expert to sit on the board.

ESG committee

As the tasks of a board of directors are manifold, it is common for board committees to be set up. The most traditional are, for example, the audit committee or the remuneration and appointments committee. As the decisions to be taken in the ESG field can be complex and highly technical, we are increasingly seeing the creation of an ‘ESG’ committee.

Ongoing training for all directors

In a rapidly changing world with constantly evolving legal requirements, board members are required to undergo continuous training.

Integrating environmental issues

Increasingly, companies have to take into account their impact on the environment. Boards of directors need to have the skills to assess the potential risks and opportunities to which they are exposed as a result of environmental issues such as climate change and measures to protect natural resources.

Good social practice

The board needs to develop a corporate strategic framework that takes account of the company’s different stakeholders, whether they be employees, suppliers, customers or members of the community.

Putting the right framework in place to attract staff

Many companies are finding it increasingly difficult to attract talent. A growing number of employees want to know the purpose and objective of their work. Companies that are attractive to these people manage to develop a roadmap and provide transparent answers to the following questions: Where are we? Where do we want to go? These are two key questions to which a board of directors must find an answer.

This article was written for the supplement supplement of the published on 19 June. It was originally published in and is published on the website to contribute to the complete Paperjam archive.