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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board's Accountability on ESG

Orion Cements Ltd's Board has identified water scarcity as a material risk to its plants. Which action best shows the Board discharging its ESG oversight role, as opposed to a management function?

The Board best discharges its oversight role by reviewing the material water risk, setting the risk appetite and monitoring management's mitigation plan through regular reports. Operational tasks like negotiating contracts or daily metering belong to management, not the Board.

  1. APersonally negotiating water purchase contracts with local suppliers
  2. BReviewing the identified risk, setting risk appetite and monitoring management's mitigation plan through periodic reportsCorrect
  3. CLeaving the matter unreported until the annual report is printed
  4. DInstructing plant staff on daily water metering

Explanation

The Board's role is to set direction, oversee risk and monitor performance. Negotiating contracts and daily metering are executive tasks. Silence until the annual report fails the duty of ongoing monitoring.

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