This article shares practical steps boards can take to strengthen social ESG governance and move the social pillar in ESG from rhetoric to results, drawing on insights from governance experts Isobel A O'Connell, Sheri Meyerhoffer, and Steven Bowman.
The S in ESG stands for 'social' and it’s how the organisation impacts people, and how the board governs those impacts. It includes the internal view of workplace practices, culture, safety, privacy, and the external view of supply chain conduct, community relationships, and broader stakeholder trust.
A helpful reframing is to not think of the social pillar as ‘soft risk’. The social pillar is a smart risk because it can affect outcomes, not just perceptions. When boards treat social issues as material to performance and trust, they move from reaction to oversight.
For not-for-profit organisations and SMEs, the social pillar is often easier to see but harder to structure. It shows up in day-to-day relationships and reputation, yet it can remain under-defined and under-measured. The practical board task is to make ‘social’ part of the organisation’s strategic narrative — not by adding jargon or paperwork, but by connecting social expectations to purpose, priorities, and decisions.
In this framing, the social pillar becomes ‘people, purpose, and practice’: who is affected by the organisation’s choices, what the organisation stands for, and how those standards are made real through behaviour and accountability.
ESG can be treated as a practical framework for staying relevant, responsible, and competitive — but it continues to generate debate because expectations evolve and definitions differ. Boards face the tension between urgency and uncertainty: stakeholders may demand action now, while standards, scoring approaches, and public narratives can remain inconsistent.
This is precisely why boards benefit from a clear decision-making approach. The point isn’t to eliminate complexity; it’s to govern through it — consistently and transparently.
A major reason for the rise of the social pillar on board agendas is that regulation and disclosure expectations are shaping what organisations report and the assessment of corporate responsibility. Obligations and expectations are also increasingly cross-border, affecting multiple regions and countries.
Examples of global ESG mandatory laws include:
It’s necessary to have a framework for the social pillar of ESG, recommends Sheri Meyerhoffer. “Even where you don’t have specific laws, or you’re not exactly sure what the law requires, if you have in place a framework or use the United Nations Guiding Principles on Business and Human Rights, then you’re going to be well ahead of the game.”
The most effective way to operationalise the social pillar in ESG is to embed it into existing board mechanics — the systems the board already uses to govern performance, risk, and accountability.
A good place to start is with reporting discipline. When boards integrate social measures into KPIs and dashboards, social factors stop being an occasional discussion topic and become part of regular oversight. From there, assigning responsibility matters: an ESG committee or working group with a clear social mandate can keep momentum and ensure follow-through.
Next is treating the ESG policy as a living asset that’s tested in real situations, reviewed, and strengthened. Learnings can be used for future decisions and discussions. The ESG policy can sit alongside other governance policies, not as a tick-box exercise, but as a guardrail for behaviour to shape the standards that empower staff, clarify expectations, and create consistency when pressure rises.
In addition, scenario planning enhances a board's strategic capability. This isn’t about predicting the future; it’s about exploring plausible ‘maybes’ and putting sensible actions in place that still make sense, even if the exact scenario doesn’t eventuate. With scenario planning, there’s the opportunity to improve foresight, strengthen oversight, and reduce surprise.
A stakeholder is anyone who is impacted by the work an organisation does, or the sector that it’s in, including the employees and volunteers of an organisation or business. Some boards are now putting a twenty, thirty, forty-year timeframe around who their stakeholders could be in the future, and looking at how they can engage with them now.
Social expectations increasingly show up through three stakeholder lenses:
Capital and funding: investors, lenders, insurers — and for not-for-profits, funders, donors, and sponsors — who look beyond financials to how social factors are governed because they affect trust, resilience, and risk.
Regulation and oversight: regulators and standard-setters shaping disclosure, safeguarding, workplace, privacy, and supply-chain expectations.
Community legitimacy: civil society, partners, and affected communities who influence reputation, social licence, and the ability to deliver outcomes.
Signals boards may monitor include:
For ESG's social pillar to shape decisions, it needs to be measurable. This means attaching KPIs, regular dashboard reporting, and setting clear expectations on what to monitor and review.
However, the goal is not to measure everything; it’s to choose metrics that make social performance visible, highlight emerging risks early, and confirm whether the organisation’s behaviour matches its stated values.
The most useful social metrics go beyond surface-level ‘scores’, and help boards to understand what people actually experience. For example, measuring customer or member satisfaction that goes beyond a single number, supported by mechanisms that reveal patterns, concerns, and changing expectations. It also includes being explicit about data protection and privacy — detailing the controls in place, whether stakeholders understand how their data is used, and what rights they have.
Boards are also increasingly measuring elements that reflect workplace fairness, capability, and trust. Gender and diversity reporting is one example, especially when it looks beyond representation to the mix of experience and perspective at the board level. Other standard measures include employee engagement, the strength of community relationships, and indicators linked to human rights and labour standards.
Because the social pillar is about people, meaningful measurement requires stakeholder input. Asking stakeholders how they experience outcomes — especially where cultural context matters — gives boards a clearer basis for judgement when navigating trade-offs and competing expectations. The stronger the board’s understanding of stakeholder experience, the stronger its oversight of risk and credibility.
The social risk landscape is not static. Boards that want to stay ahead need to scan for emerging issues periodically. Some challenges and opportunities to keep an eye on include:
Isobel O’Connell says there is depth and dynamism in social issues and challenges. In addition to the above, she also says there are three further elements to consider:
Making the move from rhetoric to results requires board discipline and leadership from the top. There are four key ways to ensure this eventuates:
Ask the right questions: the social pillar in ESG is not a ‘set and forget’. Integrate social elements into the decision-making process.
Keep pace with changing expectations and emerging, non-traditional risks: build a culture where responsibility is ongoing through board capability. Achieve this through ESG literacy or training focused on social factors.
Balancing stakeholder and investor demands: focus on outcomes, not promises.
Board oversight and transparency are critical levers: support regular reviews to update board, employee, and supplier codes of conduct, and conduct due diligence.
The ‘S’ in ESG refers to an organisation’s impact on people — and the board’s role in governing those impacts through oversight, policy, and accountability.
It means integrating people-related considerations into decisions, risk oversight, and reporting — so the social pillar is managed through normal governance, not treated as an add-on.
Both. Compliance sets baseline expectations, while strategy determines how the organisation builds trust, resilience, and long-term value through social performance.
Common areas include workforce practices (culture, safety, DEI), supply chain labour standards, privacy and data use, customer/member experience, community relationships, and social licence to operate.
Because social issues can directly affect operational outcomes and stakeholder trust, creating real reputational, regulatory, and performance impacts.
Boards typically select a small set of metrics that reveal lived experience and emerging risk, then review them regularly via dashboards and KPIs (eg, engagement, sentiment, incidents, supplier standards, privacy indicators).
Use existing board systems: define ownership, build social measures into reporting, align with risk management, and apply assurance where credibility matters.
Scenario planning tests how social risks and stakeholder expectations might shift under different plausible futures, helping boards agree on actions before pressure hits.
Governance is what holds behaviour to account — so conduct, culture, and stakeholder trust often sit across both the ‘S’ and the ‘G’.
It sets clear behavioural expectations and decision guardrails, helping leaders and staff act consistently when trade-offs and external scrutiny increase.
An ESG policy template is a starting document a board tailors to define expectations and responsibilities across environment, social, and governance pillars — then reviews and updates over time as risks, standards, and stakeholder expectations evolve.
Take your next steps by downloading the free ESG Policy Template, or watching the on-demand webinar 'Advancing the 'S' in ESG — from Rhetoric to Results'. You can also visit BoardPro, sign up for a free trial, and learn more about how board management software enables you to run refreshingly simple board meetings.