The first SACs were launched in the 1990s; and with a few notable exceptions, they were used primarily as PR tools to curry favor with increasingly vocal environmentalists and other troublesome social stakeholders. Back in the day, members of SACs (myself included), were typically engaged to review (what were then new) Corporate Responsibility/Sustainability Reports, serve as judges for staff sustainability awards, and provide advice on specific CSR or environmental initiatives by the company.
SACs typically met once or twice a year and members were almost always prominently featured on the corporate website, but seldom compensated, other than covering travel expenses and accommodations. This was presumably done to avoid the appearance that members were being "bought" but in reality, it was a statement about the perceived value of these councils: Meetings were usually run by CSR or environmental management staff. The CEO might make a symbolic appearance at the beginning or end of the meeting, but generally no senior executives or business leaders were engaged in the work of the SAC. It was a largely symbolic initiative convened for external appearances and social legitimacy. That was then.
This is now: The days of the Symbolic SAC are rapidly coming to an end: As social and environmental challenges become increasingly material, gaining serious advice on these matters is no longer a luxury. Increasingly corporations are seeking to elevate the SAC--to make it an integral part of the strategic process of the company.
In my experience, there are five keys to taking the SAC to the next level:
1. Encourage Free Speech. Include only the highest quality people from diverse backgrounds with stellar reputations and strong views. And then encourage them to speak their minds. The last thing you need is a polite group of advisors willing to rubber stamp CSR initiatives. SAC members should be encouraged to ask hard questions and introduce variety, not provide cover for existing practices and strategies.
2. Make it Real. Don't waste valuable time on peripheral activities like Sustainability Reports, Websites, and Staff Awards. Instead, engage the SAC in the real stuff--the strategic and operating challenges that are most significant to the company's future. If SAC members have not signed NDAs there is something wrong.
3. Engage the C-Suite. Cameo appearances by the Chief Executive no longer cut it. If the SAC is tackling serious strategic issues, then the CEO and other key C-Suite Executives need to be active participants in the deliberations. Deep dialogue and mutual learning can only happen when people spend time together and get to know each other.
4. Interact with the Board. The past separation between the SAC and the Board of Directors must come to an end. In tomorrow's world where sustainability and strategy are joined at the hip, the Board cannot govern effectively without access to the SAC's expertise, and the SAC cannot gain the necessary perspective without knowledge of the Board's concerns and priorities. Hold at least one joint meeting (or overlap the two meetings) each year.
5. Compensate Appropriately. Members of the Board of Directors are paid serious money for their year-round engagement in the company's governance. Nothing less should be expected from SAC members. This means that pro-bono appointments and token honoraria must give way to compensation commensurate with the new expectations. Bottom line: Don't skimp on SAC member compensation if you expect them to prioritize SAC work over the myriad of other opportunities and obligations on their plates.