Building sustainability competence from the top down: A model for researching and improving boards of directors' influence on firms' sustainability performance

Abstract

Copyright © 2018 by Emerald Publishing Limited. In this paper we develop a model for researching the influence that a board of directors can have on improving an organization's sustainability performance. Our model explores sources of cognitive flexibility of boards needed to recognize and respond to the need for improved sustainability performance. We first define concepts of sustainability, sustainability competence, and sustainability performance. We then analyze two forms of board capital (a board's human capital and its social capital) and three aspects of a board's information processing (its patterns of information search, discussion and debate, and information absorption) that we suggest affect a board's cognitive flexibility and thereby influence whether a board decides to adopt sustainability performance goals. Our model also suggests that an organization's strategic flexibility - as represented by its current endowments of resource flexibilities and coordination flexibilities - will moderate the relationship between a board's decision to adopt sustainability performance goals and an organization's subsequent achievement of those goals. We also suggest that our model is generally relevant to any research seeking to predict the influence of boards on strategic change in many forms, not just to research focused on sustainability issues.