Success with sustainability requires directors to drive bold action in a decisive fashion.

As companies come under growing pressure to make greater strides on sustainability, boards must stop thinking of sustainability as a cost or an exercise in risk management and instead view it as a business essential. 

The pressure is coming from all sides — not just from customers and the general public, but also from employees and shareholders. Today’s top talent are choosing to work for companies that align with their values over those driven solely by profit. And institutional investors are already severing ties with companies that fail to make a positive contribution to society. 

Based on our research at Russell Reynolds Associates, we know that the boards making the most progress on sustainability have gone beyond merely appointing a single sustainability director. Doing this often fragments the board and makes it difficult to build unity around critical decisions. The most advanced boards recognize that, because sustainability is a strategic issue, every director should be able to fully participate in these discussions. 

It’s time for directors to spend time and energy educating themselves on sustainability, just as they have done with other transformation imperatives, like technology or cybersecurity. We know that the best directors are those who commit to this journey.
 
In order for the board to evolve to adapt to the realities of a changing world, directors must increase their learning quotient.

The Learning Quotient

Your parents may have discussed the intelligence quotient (IQ) with you when you were a kid, because the IQ test was one of many aptitude tests we used to take in school. Since the 1990s, in the business world, the emotional intelligence quotient, or EQ — one’s ability to handle people with insight and compassion — has emerged as a valued trait. 

But, thanks to the financial crisis and the acceleration of digital transformation, a new capability has risen in importance: the learning quotient (LQ). LQ measures your readiness and ability to learn, adapt and change. It is quickly becoming one of the biggest markers of success or failure as a director today. 

What can you do to boost your board’s LQ? Here are three methods to keep in mind.
 
Have the humility to admit what you don’t know. Unsurprisingly, the best way to boost your board’s learning quotient is through education. People with high LQs have a constant habit of learning. They never stop educating themselves or challenging what they think they know. Even if you are a director with decades of knowledge and battle scars, when it comes to sustainability, we are all students. Every conversation you have with an employee, client, outside expert or external stakeholder is an opportunity to gain invaluable new insights. 

Look outside the boardroom for answers. Knowledge breeds passion. If you want your board to go “bigger, bolder, faster” on sustainability, then all directors need to feel that passion, or, at the very least, understand that sustainability is about value creation, not cost. This education isn’t always formal, nor does it have to take place in the boardroom. For example, one CEO took her entire board to Brazil, saying “I could not explain the issue and corruption we were facing. I had to take them there and show them what it means.” Or it could be as simple as inviting employees, customers or people from the local community into the boardroom. The point: Help your directors grasp how sustainability affects all of your stakeholders.

Don’t fear mistakes. Generally, boards tend to be both cost- and risk-averse. They actively try to avoid mistakes. But directors are not omniscient, nor should anyone expect them to be. We are all going to make missteps as we navigate the complex issues of sustainability. What matters more is your ability to learn from mistakes, quickly correct course and apply those lessons to future decision-making. Instead of taking a linear, gradual approach to transformation — building efforts up over five to 10 years — go all-in. Our research shows that those who take risks outperform their more cautious peers in the long term. 

To quote Jim Hagemann Snabe, chair of Maersk: “I actually believe that in times of radical change, not taking a risk is the biggest risk you can take.” 

Fortune favors the brave. Now is the time for courage. Now is the time to go bigger, bolder, and faster.
 
Clarke Murphy is board and CEO leadership advisor and former CEO of Russell Reynolds Associates, and author of Sustainable Leadership: Lessons of Vision, Courage and Grit from the CEOs Who Dared to Build a Better World.