Appointing nature to the company board
Limited companies have personality and identity. This is legally separate from the human people who hold shares, act as directors, and represent the business. The corporate status can have considerable legal consequences in property ownership, liability for debts, and of course tax.
But companies cannot operate without people. It is shareholders and directors that move the business forward and are responsible for all that is done in the company’s name. Classically, there will be a board of directors – who may or may not be shareholders – who act collectively to make strategic and operational decisions. In large firms, ten people can affect the working lives of thousands of employees, and up to millions of customers.
The majority of directors will know the business and work in it. But non-executive directors, with skills in wider areas of work - such as politics or perhaps international relations, or even charity, may be added to a board.
The most recent development in this area is adding a representative of Nature. We are all aware of global warming, the climate crisis, and the need to live our individual lives with an eye to the future of the planet. It makes sense to bring those considerations to the business of a company, and thus appoint someone to advise other directors on green operations, minimisation of waste, recycling, and more. Not only does this have merit in itself, but may be a good message to broadcast about the sense of responsibility this company has in its relationship with the earth and fellow humans, whether customers, the general public, or the company’s own employees.
The appropriately named Faith in Nature has done this very thing. The company sells soap and haircare products, as well as household cleaners and shampoo for dogs. Working with lawyers from Lawyers for Nature and the US-based Earth Law Center, the company updated its corporate documents to say that, as well as benefiting shareholders, it would do its best ‘to have a positive impact on nature as a whole’ and ‘to minimise the prospect of any harmful impact of its business operations on nature’.
It is early days, but most people would hope the idea gains traction. It is too easy to pay lip service to ecological issues, but then deposit our empty bottle of water in a non-recycle bin, buy too much food and throw some out, or leave a car engine idling unnecessarily and belching out toxins. Anyone watching TV programmes about what goes on in factories sees the huge volumes of earth’s resources and energy used up in manufacture, and watching a David Attenborough nature documentary leaves viewers appalled at the plastic and other long-life material and poisons going into our rivers and oceans.
It would be easy enough - and a quick public relations win - to appoint a Nature director. A few sound bites and an addition to the marketing effort arise, then it’s business as usual (though also watch out for social media accusations of wokery and gesture politics). But best practice dictates not only getting the right professional with good credentials and enthusiasm to make a difference, but the company has to be prepared for the long haul and maybe… to really fix some of its processes. No-one likes change, especially if this appears to mean reducing profits or investing money in new equipment.
A company must research what adding this person to the board is all about. Put shortly, by making Nature a director, the company should hope to make better-informed decisions around topics that impact it. Some of that may be a tall order. One example: it is clear that sea birds are now suffering from plasticosis, a disease arising from microplastic shreds being caught up in the digestive tract. If the company’s business involves plastic, then under the supervision of the Nature director it should research its processes to see if it is responsible for producing such material that will find its way to the sea – and do whatever is necessary to stop it.
But what if the director is in disagreement with the rest of the board or the owners of the company? What if they are not so keen to change once the figures are worked out, or indeed what if the Nature director gets too enthusiastic and begins empire-building, to demand things the company cannot practically do or pay for?
All directors are registered with Companies House and can be removed by either the board if so empowered or by a majority of shareholders in a general meeting. But the director may have other protections – a contract of employment and a watertight company resolution that requires colleagues to jump through many hoops to get rid of him or her.
It is a developing area of business and leadership. Time will tell if a difference is made both individually in companies and across our world. But responsible companies should at least be researching the idea, considering the pros and cons for their particular business, and putting it on the agenda for the next board meeting. We all live on the same planet, and no man - or company – is an island.
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