The buzz-word or term in the current business environment is “sustainable governance”. Sustainability is, for some unknown reason, based solely on three pillars namely economic; social and environmental. Governance is seen as a separate entity and yet organizations are audited on governance and not sustainability.
The fact of the matter is that governance is one of the cornerstones of
developing a sustainable organisation. Sustainability is, therefore, the outcome of the cumulative results of many factors that ensure that sustainability – governance being one of the cornerstones. For any investor, the sustainability of an organisation ought to be the basis for decision-making. All other [cornerstone] factors and not only the three pillars as per sustainability definition, need to be considered to build a sustainable organisation that worthy of investor confidence.
Why this assertion? Listed companies are reporting annually on corporate governance but not on total sustainability except on environmental, social and economic issues. A business can only turn a profit if it is sustainable in its totality. The question to pose is: Is there a difference internally between due diligence and sustainability or is it merely an academic difference?
In conclusion, corporate governance must be evaluated as a cornerstone of sustainability and a related risk assessment basis on both sustainability and governance will ensure that the organisation has a holistic risk profile against which it can measure its performance on a continuous basis in the drive to sustainability.