The role of non-executive directors and their impact on environmental, social, and governance / sustainability of companies

Abstract

Non-executive directors (NEDs) are key role players in corporate governance.1 Their role in good corporate governance will never be a mere tick box approach. Ssenyondo2 claims that this role has never been more critical. These strategic decision makers have proved to be champions of accountability, strategic oversight, and the protection of shareholder interests3 According to Ssenyondo’s article, through their role as a vehicle of governing oversight and collaboration, they have addressed complex challenges, including the growing prominence of environmental, social, and governance (ESG) imperatives, heightened regulatory scrutiny, and the transformative influence of disruptive technologies. The long-term existence or sustainability of a business is subject to the skill(s), care and diligence of its leadership.4 The interpretation of sustainability is paramount in corporate governance language because it is relevant to several factors, including the way the company is led and governed, the company’s approach to ESG considerations, and the company’s code of ethics, which reflects the company’s vision and values.5 Regrettably, to date, there is no ‘standardised’ definition of sustainability in legal jurisprudence while in corporate governance it may depends on a framework and context.