ESG is coming. This is not one possible future that may or may not come to pass. This is the future, like tomorrow, next year, it’s inevitable. So, businesses should expect that this is going to be something they’ll have to care about.
What Hospice Boards Should Know About ESG
The acronym ESG, which stands for environmental, social and governance, has taken on increasing importance for publicly traded companies, but should all hospice boards be paying attention? Matt Kelly, is Editor and CEO of Radical Compliance, says yes – for several reasons. Regulators want companies to care about it, respond to it, and make various disclosures about it. The general public cares about it. And hospice stakeholder groups care about it. Bill Musick, President of Integriti3D, interviews Matt on the critical importance of ESG, what hospice boards should know, and how they can start addressing ESG today.
Segment 1: An Introduction to ESG
Environmental, Social and Governance describes the issues about corporate performance that people care about, but are not directly financial in nature. Matt shares why ESG is important today for both for-profit and non-profit hospices.
Environmental – Encompasses carbon footprint, water usage, commitments to sustainability, and anything businesses already comply with in terms of environmental health and safety standards.
Social – Anything from fair labor practices to diversity in the workforce and management team, to dealings with unionized workers, promotion and hiring practices, and the like.
Governance – Governance is more about the board itself – how it thinks through its key business objectives, the diversity within the board, policies, practices, handling board elections, and policies about donations to political campaigns or causes.
Segment 2: How Boards Can Drive ESG Improvements
From smaller non-profit hospices all the way to very large for-profit publicly traded firms, hospice boards have a wide range of different duties. Fundamentally, the board’s job in every scenario is to tell management what to care about. Matt shares some questions to consider when deciding ESG objectives, including:
- Are the goals enough for what the hospice wants to accomplish as a business?
- Has management put the processes in place to achieve these objectives?
- Does the board have internal controls, risk management checks, and systems in place to monitor progress?
- Who in the organizational level of the business will be accountable for ESG efforts?
- Who on the board will be accountable for operational risks and corporate culture?
Segment 3: The Future of ESG
Matt Kelly shares his view on the future of ESG and how it may impact hospice boards for years to come.
“More attention to ESG from your stakeholders means you are going to have to pay more attention to it as well. Defining your objectives, making sure that your company is pursuing them correctly, you’re getting the right data and reporting about ESG, that you can measure progress towards whatever objectives you have set out, and you’re explaining to your key stakeholders how that’s all going. All of that is going to be more important to you to be able to demonstrate the value of your organization to your key stakeholders.”
- There could be real operational consequences and issues that arise from organizations mishandling ESG.
- Organizations will suffer real reputation harm or loss of business partners or customers if they are found to have poor ESG awareness.
- Be prepared for more. Social media sensitivities, climate change concern, and diversity and inclusion efforts are not going away.
Finally, hospice-focused board development
The Hospice Governance Academy was created to provide industry-specific content directly to hospice leaders. HGA is an easy, online learning platform that ensures your board has a shared base of core hospice governance knowledge and is up-to-date on trends and issues facing hospice care today. Content is contributed regularly by industry recognized experts.