ESG is here there and everywhere.

The three new letters have in many cases replaced C, S and R, and many have found a new go-to term to replace CSR.

E stands for Environmental, S stands for Social and G stands for Governance. And we’d argue that the inclusion of governance is the reason why ESG has gained so much ground.

Because in many years, proper governance is what has been lacking, and what has been keeping companies from taking their efforts to the next level.

Starting up with a more formalised approach to governance can be tricky though.

Therefore, we suggest that you start by creating a governance model.

What is a governance model?

A governance model is a model or framework that draws up how an organization is directed, controlled, and held accountable.

Basically, it shows how you make decisions and allocate resources, and achieve goals.

It defines the roles and responsibilities of the different organisation members such as the board of directors, management, shareholders, employees, and other parties.

Governance models can vary widely depending on what kind of company you are, your size and your goals.

Why do you need one?

It will help you establish clear roles and responsibilities.

This can ensure that you comply with relevant laws and regulations.

By setting up the processes and assigning roles and responsibilities you can mitigate risk and promote accountability.

It will also facilitate efficient and effective decision making, making your company run more smoothly.

As you show how your company is run, you increase transparency.

So set up a meeting today with your company’s decision makers, and develop a model that reflects your company as it is run today, or perhaps even better – how you want it to be run tomorrow.