Transformational Governance Tool
This self-assessment tool provides a framework for engaging with and applying the principles of transformational governance.
The foundation
Sustainable Development Goal 16 is to promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.
This foundational Goal underpins the approach of transformational governance.
Transformational Governance
Transformational governance is a principles-based approach — not a new legal concept — that calls on businesses to be more accountable, ethical, inclusive and transparent as drivers of responsible conduct, enhanced ESG performance and strengthened public institutions, laws and systems.
This means fostering a culture of integrity, fairness and inclusion beyond legal formality — asking not just what is legal but what is right. It seeks to provide a broader and more ambitious benchmark for corporate contributions towards just, peaceful and prosperous societies, in line with SDG 16.
How can this tool help us?
This self-assessment tool provides a framework for engaging with and applying the principles of transformational governance.
It is structured in a way that allows businesses to assess their status quo on transformational governance, both with regard to their own operations as well as in relation to their business partners, suppliers and downstream activities.
It contains recommendations on potential next steps as well as selected resources and additional guidance to support your company in transforming your governance, both internally and in the communities where your company operates.
It considers a company's engagement and collaboration with external stakeholders.
It is an opportunity to grow your awareness of TG-related topics that will give your company valuable insights to carry forward.
For each area of transformational governance, the tool contains a set of criteria providing a detailed understanding of any key gaps in your current approach as well as opportunities to further strengthen your policies and procedures, mapped against relevant SDG 16 targets.
How is Transformational Governance different from conventional Corporate Governance?
Transformational governance proposes a more holistic reading of the G in ESG. As such, it provides a lens through which businesses can enhance and expand their understanding of governance not only with regard to their internal governance (corporate governance) but also with regard to how they impact the environment and societies where they operate (sustainable governance) and how they may contribute to building strong, transparent and effective institutions at different levels (global governance).
How does Transformational Governance relate to the Ten Principles?
Peace, justice and strong institutions are foundational for upholding the Ten Principles of the UN Global Compact – and important for companies' long-term viability.
Thus, transformational governance helps companies contribute to the creation of an environment in which societies and companies can thrive and prosper.
As such, it cuts across and underpins companies' commitment to each of the Ten Principles. For example, it encourages companies to take more ambitious action on anti-corruption and integrity, mainstream human rights and environmental due diligence and safeguarding the most vulnerable workers.
Similarly, companies participating in the UN Global Compact will find that engaging with the concept of transformational governance will help them identify and report actions across various sections of the Communication on Progress (CoP).
Why is Transformational Governance important to my business?
There are some key benefits for businesses in engaging more systematically with the SDG 16 Business Framework and investing in Transformational Governance:
Responsible businesses want to operate and serve in communities where there are institutions, laws and systems that protect their rights and the rights of the individuals they employ and serve. By supporting the central tenets of SDG 16, they foster more sustainable, inclusive and stable societies - which in turn benefits the business itself.
There are increasing demands on companies to act responsibly and demonstrate ethical leadership. These include legal frameworks on sustainability due diligence and reporting, but also increasing demands from investors. Transformational Governance can help companies identify and address gaps vis-a-vis such expectations.
As employees and stakeholders pay increasing attention to a company's values, principles and behaviours, committing to Transformational Governance and demonstrating responsible business conduct can be a vital asset for companies in attracting talent and strengthening relationships.
This self-assessment tool provides a framework for you to engage with and apply the principles of Transformational Governance
The Think Lab on Transformational Governance thanks the business participants and Ergon Consulting for their input and contribution to developing this self-assessment tool.