CHALLENGES IN TRANSITION FROM G3/G3.1 TO G4
GOVERNANCE
Introduction
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As per GRI standard disclosure related to governance provides an overview of:
The governance structure and its composition
The role of the highest governance body in setting the organization’s purpose, values, and strategy
The competencies and performance evaluation of the highest governance body
The role of the highest governance body in risk management
The role of the highest governance body in sustainability reporting
The role of the highest governance body in evaluating economic, environmental and social performance
Remuneration and incentives
Governance Structure and its Composition
As per GRI transparency on the governance structure and composition of the organization is important to ensure the accountability of the relevant bodies and individuals. These Standard Disclosures describe how the highest governance body is established and structured in support of the organization’s purpose, and how this purpose relates to economic, environmental and social dimensions.
The role of the highest governance body in setting the organization’s purpose, values, and strategy
According to GRI the highest governance body sets the pitch for the organization, and has a major role in defining its purpose, values and strategy. The reporting organization mentions in the report the highest governance body’s and senior executives’ roles in the development, approval, and updating of the organization’s purpose, value or mission statements, strategies, policies, and goals related to economic, environmental and social impacts.
The competencies and performance evaluation of the highest governance body
According to GRI the standard disclosure describe the highest governance body’s and senior executives’ willingness and capability to understand, discuss, and effectively respond to economic, environmental and social impacts; and show if a process is in place, conducted internally or externally, to ensure the highest governance body’s continuing effectiveness.
The role of the highest governance body in risk management
The standard disclosure describes if the highest governance body is accountable for risk management process and its overall effectiveness. According to GRI the highest governance bodies and senior executive’s consideration of risk elements and their integration into strategic planning are important governance disclosures.
The role of the highest governance body in sustainability reporting
The disclosure explains the extent of the highest governance body’s involvement in developing and approving the organization’s sustainability disclosures, and the degree by which it may be aligned with processes around financial reporting. It also ensures that all the material aspects are included.
The role of the highest governance body in evaluating economic, environmental and social performance
The disclosure explains how the highest governance body is involved in monitoring and reacting to the organization’s performance for economic, environmental and social topics. Since economic, environmental and social performance presents risks and opportunities it is important for the highest governing body to address the critical issues concerned wherever appropriate.
Remuneration and incentives
The disclosure highlights the remuneration policies established to ensure that remuneration arrangements support the strategic aims of the organization, align with the interests of stakeholders, and enable the recruitment, motivation and retention of members of the highest governance body, senior executives, and employees.