Livia Piermattei | Methodos and NedCommunity - Integrated governance

«Integratedthinking in the board» Anew MindsetforBoard Members

SUSTAINABLE FINANCE AND INTEGRATED THINKING: today and tomorrow 2^ InternationalConference Trieste, MIB Schoolof Management 16th October, 2018

Livia Piermattei Managing Partner, Methodos, The Change Management Company Scientific Committee, Nedcommunity

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Whatis therealfocus of esgtrasformation?

• REPORTS? • DECISION MAKING PROCESSES? • MINDSET & BEHAVIOURS? 2

Twoforms of value for silos thinking Silos Thinking

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Allforms of value for integrated thinking

Integrated Thinking 4

Yesterday

The integratedthinkingtransformation journey 2 FORMS OF VALUE

SILO THINKING

FUNCTIONAL COMPANY

20%

Today

A NEW APPROACH TO BUSINESS FOR A SUSTAINABLE GROWTH

ALL FORMS OF VALUE

100% INTEGRATED THINKING

INTEGRATED COMPANY

«A COMPANY WITH A SENSE OF PURPOSE*» *Source: 2018 Letter to Corporate Larry Fink/BlackRock

Full Potential

Whatis integrated governance

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Integrated governance is a journey

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The three steps of a transformation journey

Responsibilit y

Understanding cultural sensitivity

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Committment Capabilities

Source: Methodos Cultural Change ManagementModel

Ourresearch shows the gap to closeto become an integratedthinking board

Lagging strategic orientation

Leadinglong term strategic orientation

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Source: Nedcommunity -Methodos, Survey onthe role ofthe board of directorswith regardtonon-financial disclosure, 2018

Ourresearch shows the gap to closethe gap to closefor independent directors in integratedthinking and governance

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Source: Nedcommunity -Methodos, Survey onthe role ofthe board of directorswith regardtonon-financial disclosure, 2018

The journey towards integrated governance

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Source: Nedcommunity

Nedcommunity newleadership modelfor integrated governance Composition Diversity of: • gender,

Culture: Mindset/Behaviours Aforwardlooking and beyond compliance attitude, through scenario analysis

(Strategic Focus and Long Term Orientation)

• race, • demography, • skills and expertise covering also ESG, transformation, crises and turnaround, new and cross market, digital and media

Committees working together, able to catch and manage connections and interrelations of allforms of value (Connectivity) Active stakeholderlistening tolookforchallenges and innovation opportunities

(Stakeholder Inclusiveness) Informalrelationships, Teamwork, Controllable ego andlistening skills

(Cross-collaboration) Openness to allforms of diversity, Trust, Transparency in conflicts, independentthinking

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(Open Mind)

Processes w/ESG integration • Board Materiality Statement • Stakeholder governance and disclosure • ERM-Enterprise Risk Management • Remuneration-Long-term vesting periods for MBO’s (KPI’s+incidence rate) • Board evaluation • Board succession guidelines • Integrated and sustainability report in depth analysis before approval • Affiliations • Inductions and off-site meetings for scenario analysis and long term strategy envisioning

The journey towards integrated governance STRATEGIC FOCUS AND LONG TERM ORIENTATION

OPEN MIND CONNECTIVITY

CROSS COLLABORATION

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STAKEHOLDER INCLUSIVENESS

• Work on soft skills for a new Board Leadership • Work on 360^ Risk Culture • Work on the kick-off of the Change Process within the Board Nedcommunity Reflectiongroup on «New Leadership ModelsforBoard Members» is carried on in collaborationwith Methodos, the Change Management Company

Sustainability issues are wellpromoted by Risk & Audit Committees

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Source: Nedcommunity -Methodos, Survey onthe role ofthe board of directorswith regardtonon-financial disclosure, 2018

The importance of mindsetand attitudes in Committees dealing with Sustainability

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Source: Nedcommunity -Methodos, Survey onthe role ofthe board of directorswith regardtonon-financial disclosure, 2018

THANK YOU AND ENJOY YOUR INTEGRATED THINKING JOURNEY!

l.piermattei@methodos.com www.integratedthinking.it http://www.m4810.com/

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