Good morning,
Corporate directors often say they crave complete and unfiltered information about the companies they oversee. To that end, board members even visit company sites to chat directly with employees and gather intel on how well an organization is executing a strategy, and see for themselves the challenges workers are experiencing.
Well, a new survey by the Harris Poll and the Center for Sustainable Business at the University of Pittsburgh might save some travel time for directors curious about what workers really think of their company’s climate change efforts. The full results, shared with Fortune and outlined for MIT Sloan Management Review, paint a grim picture that almost certainly contradicts the cherry-picked information directors are given at board meetings.
It finds that 43% of employees think short-term focus, lack of investor interest and leadership that is apathetic towards sustainability is a challenge for their company. And only about one-third of workers say their companies have made “significant strides” toward hitting environmental goals. Perhaps most alarming? The line “Our leaders don’t believe in sustainability” resonated with 40% of respondents.
The survey suggests that many business leaders are either not pursuing climate-friendly goals, merely giving lip service to the environment, not communicating clearly with workers, or some combination of the above. But one thing is clear, according to CB Bhattacharya, director of the University of Pittsburgh’s center and a professor at the Katz Graduate School of Business: “It’s vivid as day that employees see companies are overly focused on profits and the short term.”
Employees can’t do much about this problem, he adds, but boards have the power to hold management teams accountable and insist that companies do better. What’s more, they should be motivated to do so, not only because employees might one day publicly criticize companies with accusations of misleading consumers and investors, but because the consequences of climate change are becoming increasingly obvious and dire.
Here’s what Bhattacharya would like to see boards do:
—Ensure that a company’s top management team “defines the value that the organization is creating for society” through their ESG goals, says Bhattacharya. “If a company cannot articulate that in this day and age, if sustainability has absolutely no place, then we are doomed.”
—Embed sustainability into every corporate practice, and make it a part of the company’s strategy. Bhattacharya, who is also the author of a book on this topic, Small Actions, Big Difference, says that the management team is responsible for developing a company’s climate strategy, but the board can create the capacity and impetus for the CEO and leadership team to do so.
—Allocate money and resources to train employees, so that they’re aware of the company’s sustainability goals and know how to fulfill them. Because boards oversee how resources are used, they can make environmental protection a priority, says the professor, and shift the focus away from a singular “obsession on quarterly profits and pandering to the market.”
Threading concern for the natural world into every corporate practice is not rocket science, Bhattacharya adds, “but it’s a mindset, and it’s hard work.”
His center plans to partner with the Harris Poll to conduct this survey annually and track trends. Stay tuned.
Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan
Noted
“I’ve learned to hate the terms ‘remote,’ ‘hybrid,’ and ‘productive.’ ‘Remote’ and ‘hybrid’ are leading us into fights we don’t need to have. ‘Productive’ is a misguided way to measure office work and destructive to employee morale. All three keep us from focusing on real opportunities to make work better for people and organizations.”
—Brian Elliott, cofounder and executive leader of Future Forum, a Slack-backed think tank that studies the future of work, in a column for Charter.
On the Agenda
👓 Spencer Stuart’s newest report on diversity among new board members shows that 67% of incoming directors identified as a member of an underrepresented group in 2023, and that diverse board composition is a top issue for nominating and governance committees. However, the share of new directors who are Black fell from 26% in 2022 to 15% in 2023.
🎧 In this episode of the Governance Matters podcast, Keir Gumbs, chief legal officer at Broadridge Financial Solutions, joined Ben Maiden, editor-at-large at trade publication Corporate Secretary, to describe how and why his team is experimenting with A.I. applications. In generative A.I., he says, he sees opportunities for lawyers and governance professionals to do more in less time.
📖 Bookmark these short profiles of the fascinating entrepreneurs selected to join Fortune’s inaugural Founders Forum, a networking group for early-stage business leaders. You may spot a board candidate or two in the mix.
In Brief
—Women may reach parity in corporate leadership roles by 2030, according to the least conservative projections from S&P Global Market Intelligence, the research arm of the well-known financial analytics company. (Its most conservative estimate sees women holding 50% of top jobs by 2037.) Most progress will be made on corporate boards, Fortune reports, rather than in C-suites.
—Companies that publicized their support for abortion rights in job ads saw an 8% jump in visits to their postings, according to a large new study of data gathered from careers site Indeed. The same companies also saw an 8% decrease in positive reviews of senior management by male employees.
—Three WeWork board members resigned last week over “a material disagreement regarding board governance and the company’s strategic and tactical direction,” according to a company filing. The struggling coworking real estate firm replaced the outgoing executives with four independent directors who are experts in bankruptcy proceedings.
—A federal judge in Washington State dismissed a lawsuit against Starbucks brought by an “anti-woke” activist group that claimed the company’s goals to hire diverse employees violated antidiscrimination laws. “If the plaintiff doesn’t want to be invested in 'woke' corporate America, perhaps it should seek other investment opportunities rather than wasting this court’s time,” said Chief U.S. District Judge Stanley Bastian.
The Long Read
Goldman Sachs keeps suffering from high-profile departures, and New York Magazine can help explain why. Staffers quoted in the article describe CEO David Solomon as a man who “dehumanizes” people when he speaks to them. “Morale has sunk to the lowest level in recent memory,” journalist Jen Wieczner writes, “in tandem with a sense that the bank inspires less envy among its rivals and less esteem among its fee-paying clients and governments around the world.”
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