Integrated Governance - A new model of governance for sustainability

KKS Advisors & The UNEPFI/ June 2014
Sakis Kotsantonis and George Serafeim

Corporate governance is the overarching structure under which everything else – competitiveness, strategy, performance and operations – occurs. Investors and other stakeholders interested in sustainability policies and performance of corporations expect to see the inclusion of sustainability in corporate governance. Yet more often than not, governance structures and operations still tend to either ignore sustainability or pigeonhole it.

The UNEP FI and KKS Advisors conducted research to identify corporate governance practices that could promote a durable culture of sustainability within corporations. As companies increasingly recognize the need to develop a sustainable strategy, where sustainability issues are integrated into the core of the business model, a respective need is created for a governance model that is able to supervise the formulation and execution of such a strategy. We developed a new governance model, ‘Integrated Governance.’ Integrated governance is the system by which companies are directed and controlled, in which sustainability issues are integrated in a way that ensures value creation for the company and beneficial results for all stakeholders in the long term.’ Integrated governance provides a framework for companies to move from ‘governance for sustainability’ to an integrated governance perspective.

The report was launched at the 2014 ICGN (International Corporate Governance Network) annual conference.

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