Future of Work 2023: The social component of ESG. How important it is to have women in the Board of Directors

The second panel of Business Review’s recent Working Romania HR Conference had as its subject the use and implementation of ESG (Environmental, social and governance) in companies, but also elements such as the involvement of women in business, gender equality and social inclusion. The discussions went to the strategies that companies must have in order to tick all the elements related to ESG and more.

As Valentin Bolozan, HR Director at Globalworth, the moderator of the panel, showed, these ESG objectives already exist in the strategy of large companies, which rather belong to the non-financial area of activity.

“Increasingly, companies are no longer solely responsible for profit. Investors and shareholders also look at how this profit is made. That’s why, if we look at the whole ESG, we can see that it’s about the environment sector, a social sector and a corporate governance sector. In Globalworth, what we do is we also look carefully at the social side, at the employees coming back to the office. Organizational culture is built with people coming to the office and socializing, not with people sitting at home with a laptop. I noticed that the part of natural light, green spaces, etc. are very important for employees and are part of ESG. We, as office builders, when we start a project establish the ESG elements from the start, including the demolition part, what happens when the life cycle of the building ends”, says Valentin Bolozan.

Regarding the participation of women in management, Bolozan shows that almost 17% of the Board’s positions are already occupied by women. Nicoleta Munteanu, Vice-President at CONAF, but also an entrepreneur for more than 20 years, spoke about the promotion of entrepreneurship through education. “Many women entrepreneurs start their businesses without any education and then have to learn what a business is all about. I learned as a child that it is very important for young female entrepreneurs to have financial and economic education before starting a business. Entrepreneurial, financial and legal education is important to be done from the earliest possible age, and even if they don’t become businessmen, education will help them a lot in life”, says Nicoleta Munteanu.

“The role of the entrepreneur as a role model for younger people, a role model to inspire and educate and advise, is very important. In the old days, when I started, I discovered mentors in business partners, because there were no formal mentors anywhere”, says Nicoleta Munteanu.

Virginia Otel, Co-President at Global Professional Women’s Network, showed that there is a misunderstanding of English terms when we talk about the involvement of women in the management of companies.

“In Romania it is understood that Director in English means occupying an operational position, as we use the term. But no, Director means a member of the Board of Directors of a company, not an operational or executive position. If we look at the companies listed on the Bucharest Stock Exchange, we notice that in the case of women on the Boards of Directors, the percentage is 18%, that is, very low”, says Virginia Otel.

Globally, gender parity at the management level is just as low, and studies show that if everything moves as it is now it will take decades and even hundreds of years to reach gender parity. Including political representation, Romania occupies a place towards the tail of the global ranking. Women are best represented in industries where women are also the majority employed, but not in industries dominated by male employees.

“ESG is no longer a novelty for anyone nowadays,” says Andrada Popescu, Senior Associate at Noerr. “If before it was a niche element that concerned only investors in their decision to invest in a company, nowadays it has turned into a societal megatrend. Now companies are looking at how they can be part of the ESG phenomenon, what steps they can take to be part of the ESG action. And if ESG is no longer a novelty, the social component has only now begun to take shape, unfortunately it has been overlooked for too long. That’s why we don’t have any guide to show us if one ESG component is more important than another, so companies should look carefully at all the elements because a poor social score could overshadow a very good environmental score. We have the example of Tesla, which was excluded from the ESP 500 ESG Index because, although it had some good policies in the environmental area, it had very weak policies in the social area”, says Andrada Popescu.

“Why it would be important for companies is that employees and associations have also started to look at the Social element of ESG. Candidates want to see what the company’s principles are, its values, how many women are on the board. That’s why companies should be more attentive to the social area of ESG”, concludes Andrada Popescu.

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