But, over time, thinking on what the agenda ought to be for boards and for company directors has been changing. It needs to. I also remember a board meeting with a major UK chemical company in the early 1990s, where there was a palpable sense of pride that it had reached the point of being 80 per cent compliant with the relevant environmental legislation-which meant that it was 20 per cent in dereliction of its duties.
Increasingly, such dereliction will result in punitive fines and, in some cases, prison sentences. While many readers may smile wryly at these stories, in the belief that they reflect a very different century, many-if not most-boards remain unbelievably ignorant on the likely impact of new EU regulations such as REACH, or of abrupt climate change.
In his 1996 book The Fish Rots from the Head, Bob Garratt noted that it is important that boards not only recognise real progress when it happens, but also acknowledge when mistakes are being made. "In most organisations the idea of publicly admitting your mistakes is seen as corporate suicide, or at best career limiting," he asserted. "When they make a mistake, people do what they have learned to do since the cradle-they cover up." This, incidentally, was long before the Enron, WorldCom and BP scandals, let alone the controversy around Steve Jobs's stock options.
More positively, our international surveys of corporate non-financial reporting, carried out with Standard & Poor's, show that leading companies now disclose details of their corporate governance-and, in some cases, the dilemmas they face-which would have been unthinkable a few years ago. But we are still some way from meeting the recommendations of my 1997 book, Cannibals with Forks: The Triple Bottom Line of Twenty-First Century Business. I predicted that "the sustainability agenda will increasingly overlap the corporate governance agenda", underscoring the fact that "high performance boards are critical to the sustainability transition". One key to success, the book concluded, would be to develop more inclusive forms of stakeholder dialogue, up to and including boards. But it was already clear that the real key would be to change the selection criteria for board directors, particularly non-executives, to reflect the diversity, extended time-scales and growing urgency of the emerging challenges.
There are signs that things are moving. In its December 2006 issue, for example, the Harvard Business Review published a pair of extraordinary articles, one by Michael Porter and Mark Kramer, the other by Clayton Christensen and colleagues. With every confidence that anyone who reads Director also reads HBR religiously, all I need do here is to refresh memories.
Porter and Kramer say that efforts by companies to improve their social and environmental performance have been less successful than they might have been, stressing that these emerging priorities need to be integrated into the guts of corporate governance and operational management. "Without a careful process for identifying evolving social effects of tomorrow," they conclude, "firms may risk their very survival."
The Christensen team go further, explaining that the scale of many social and environmental challenges means that conventional corporate citizenship strategies are unlikely to make the cut. Instead, the social sector-and, ultimately, mainstream companies and their boards-now needs to respond to new social and environmental challenges both strategically and, as the change imperative builds, disruptively.
John Elkington is co-founder and chief entrepreneur of SustainAbility (www.sustainability.com) and writer of books including the groundbreaking Cannibals with Forks: Triple Bottom Line of 21st Century Business