Board Committee Charters and ESG Accountability

36 Pages Posted: 1 Feb 2023 Last revised: 30 May 2023

See all articles by Lisa M. Fairfax

Lisa M. Fairfax

University of Pennsylvania Carey Law School - Institute for Law and Economics

Date Written: January 18, 2023


We are currently witnessing a sharp increase in corporate attention on environmental, sustainability, and governance (“ESG”). The steep rise in corporate focus on ESG has prompted considerable criticism, not only from those concerned about how best to ensure that corporations are held accountable for their ESG commitments, but also from those who strenuously insist that corporate commitment to ESG is merely rhetorical or otherwise merely a passing fad. In an effort to shed light on the concerns around ESG accountability, and gain perspective about the potential illusory or short-term nature of ESG, I conducted my own survey of the committee charters of the top 50 companies in the Fortune 100, which survey revealed a sizeable increase in the number of corporations altering their board committee charters to account for enhanced board oversight over ESG activities.

Based on this survey, this essay makes several important contributions to the ESG discourse. First, this essay highlights the substantial increase in board committee charters incorporating oversight of ESG activities and argues that the increase strongly suggest that boards have begun to take necessary steps to better monitor ESG matters. Second, this essay argues that board oversight of ESG activities is a necessary though far from sufficient measure for ensuring greater accountability over corporate ESG activities, and thus that committee charters reflecting ESG oversight are a welcome and important development for purposes of enhancing ESG accountability. Third, this essay asserts that the existence of these revised committee charters serves as a repudiation of claims that corporate ESG rhetoric has not translated into increased board and corporate focus on ESG activities, at least at some level. While by no means suggesting that corporate ESG commitments are perfectly aligned with corporate behavior, this essay and its survey do call into the question the broad-sweeping condemnation of corporate ESG commitments as illusory and thus insignificant. Fourth, given Delaware courts’ recent emphasis on the need for board-level oversight of core ESG activities to be specifically tailored, this essay argues that we should be mindful of the specific ESG activities emphasized in, as well as those left out of, this new wave of committee charters for what they may suggest about gaps in accountability or increased potential for liability. Finally, and in light of the importance of committee charters to the board oversight and accountability function, this essay insists that the growing number of board committee charters reflecting oversight of ESG increases the likelihood that corporate attention on ESG will be long-term, thereby undercutting those who are predicting (are hoping for?) ESG’s quick demise.

Keywords: Securities law & regulation, corporate governance, environmental, social & governance, ESG, board oversight, committee charters, accountability, transparency, investors, stakeholders, empirical legal studies

JEL Classification: D22, D63, G34, K22

Suggested Citation

Fairfax, Lisa M., Board Committee Charters and ESG Accountability (January 18, 2023). 12 Harv. Bus. L. J.372 (2022), U of Penn, Inst for Law & Econ Research Paper No. 23-02, Available at SSRN:

Lisa M. Fairfax (Contact Author)

University of Pennsylvania Carey Law School - Institute for Law and Economics ( email )

3501 Sansom Street
University of Pennsylvania Carey School of Law
Philadelphia, PA 19104
United States
215-746-2243 (Phone)
215-573-2025 (Fax)

HOME PAGE: http://

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics