WHERE GOVERNANCE BEGINS
Corporate governance begins with the Board of Directors. It is in this arena that the EHS officer can provide unique input. The EHS officer has experience in managing health and safety risk, assuring compliance, and relating these issues to multiple groups, e.g., non-government organizations (NGOs), the Securities and Exchange Commission, strategy boards, audit committees, and, sometimes, the public. In the end, the company's record in this area reflects its ability to manage risk and brand reputation or value. The EHS officer can help board members clarify key points about the company they serve.
First of all, the EHS officer can help the Board comprehend the strategic vision of the company's services and/or products, and the role the company plays in the global marketplace. Consider the auto industry. The current vision of mobile society centers primarily on personal cars. But today, 100 years after the invention of the automobile, only 12 percent of the people in the world enjoy that vision. And for developing nations, mobility is one of the keys to improved quality of life. Balanced against that is the fact that if vehicle ownership were as pervasive globally as it is in the U.S., there would be some three billion cars in the world. Obviously, the world could not sustain that — even if the vehicles used today's clean internal combustion engines. So at GM, we spent considerable time developing a vision that didn't require a compromise for our customers. In January, GM unveiled a concept vehicle that put that vision on wheels. It's called the AUTOnomy, and it's the first vehicle designed around a hydrogen-powered fuel cell propulsion system.
Second, the EHS officer can help the Board see a plan for enhancing the brand — which in turn enhances shareholder value. That means the Board needs to understand what the market expects, and the inherent future risks in that business sector. In the auto industry, the market expects vehicles that meet certain performance characteristics. In recent years, the market has defined those characteristics as those of SUVs. Building and selling those vehicles comes with risks, such as different emissions and fuel economy than smaller passenger cars.
The third area in which the EHS officer can help the Board is in understanding how the company relates to its many stakeholders. This means not only interacting with NGOs, but also with stakeholders such as Wall Street analysts, unions, employee groups, opinion leaders and government entities worldwide. Companies need to be in touch with these groups. Corporate governance is about leadership. Leadership with integrity, responsibility, and transparency.