By Jasper van Brakel

If ESG is a foot in the door to an economy built around sustainability, inclusion and equity, then governance is the power that’s going to kick that door wide open and make way for real progress on corporate environmental and social performance.

Governance doesn’t get nearly as much scrutiny as the other two ESG factors. It’s treated as a dull exercise in compliance and fiduciary duty to shareholders or discussed only in terms of increasing board diversity. Bringing more women and people of color onto boards is necessary, but it is not sufficient to drive the change impact investors and advocates want. Stakeholder capitalism that seeks input from stakeholders but is ultimately concerned with only one outcome—creating value for shareholders—isn’t really stakeholder capitalism.

Read the full article on ImpactAlpha.