Spending time at the GRI global conference in Amsterdam, where I chaired the business plenary session, was a good opportunity to reflect on the three report review panels I’ve been involved with over the past year, and to distill some lessons about how these panels do—and don’t—deliver.
For this year’s reporting cycle, I’ve had the great privilege of facilitating the Nike review panel with BSR colleagues, chairing the Shell panel, and participating in the SAP review panel. These assignments have been attractive in no small part because each of these companies takes an innovative approach to their reports, and each has demonstrated a real commitment to transparency with their respective committees. I believe that these panels have resulted in better, more compelling reports, and they have helped the companies’ leaders better understand external perspectives on their sustainability performance.
The experiences have also delivered useful lessons that suggest some broad principles for all companies to consider in launching or redefining their own panels. These lessons could inform the next generation of these efforts.
No Investment, No Return
First, give the process the time it deserves. Perhaps the biggest variable in making panels a success is ensuring sufficient time for real dialogue among panel members and company decision-makers. For many companies, this is no small task: The CEO may not be sufficiently briefed or may have (many) other priorities. Regardless of whether the CEO is involved, however, panel members instinctively know when they are getting the direct story, and when they are getting something less. In my experience, panels are much more likely to provide the benefit of the doubt (and there is always some doubt) for companies in cases when they know the top executives take sustainability seriously and respect voices outside the company.
Whole Greater than the Sum of the Parts
Choose panel members with both distinct expertise and big-picture views in mind. The best panels I’ve been involved in have been those in which the individual members complement each other. This means that each member of the panel should bring something distinct that is relevant to the company‘s business. This may involve experience with processes like innovation, expertise in geographies that are particularly important to the company, or knowledge of the most material issues covered in the report. Panel members with this type of authority are crucial to gain the trust and respect of company executives.
At the same time, it is necessary that panel members also be able to look at the big picture, and not focus only on their particular areas of expertise. It is increasingly valuable to have geographic balance, and this can be hard to achieve without devoting more time and money to the review process.
Panel 1.0 Meets Web 2.0
Events don’t adhere to report publication schedules, so panels need to be ready to respond to fast-changing developments. Panels may well struggle to keep pace with the demand for real-time information about material sustainability issues. I believe it is likely that many companies will move to a more modular reporting approach, with updates on some issues coming far more often than once a year. Similarly, more and more companies are creating web-enabled reports that allow readers to manipulate data according to what’s most important to them.
This is all to be welcomed, but it raises the question of whether panels as they have been organized in the past few years will be up to the task of reviewing these more dynamic reporting models. And if not, companies—and panel members—will need to determine whether ongoing engagement, rather than the seasonal approach, is viable. Otherwise, reporting will simply move more quickly than panel review, and value will be lost.
The line between reviewing reporting and performance is a very fine line indeed. In my experience, panel members always want to have the chance to influence policy. After all, as I suggested at the GRI, it is possible to have a technically impressive report for a company that’s doing little on sustainability, and few stakeholders will want to spend time applauding that. It is therefore crucial to define the terms of engagement very clearly. If it’s about reporting, keep to that. There is a natural tendency for panel members to seek to expand the scope, and all parties will be more productive if the mission is clear from the start.
Is This Assurance or Not?
Finally, all should be clear about whether panels are actually assuring the report. At the GRI, there were rumblings from auditing firms that the lines are blurring between what they do and what expert panels do. It seems clear to me that expert or stakeholder panels have little or no role to play in what we consider to be traditional assurance, and that point should be reinforced.
In addition to these points, there is one fairly boring—but very important—thing to keep in mind: Be practical and be on time. In terms of practicality, my sense is that panels should have no more than five people on them, even though that means that some important perspectives may be missed. In addition, review processes can get derailed when deadlines are missed by either the company or the panel.
As this year’s reporting season draws to a close, these impressions are top of mind. I’ll come back soon with some thoughts about how panels should evolve and improve in the years ahead.