Governance and value creation

Governance is interdependent with the strategy, the process, and the ultimate goal of the company, i.e., value creation. Effective governance is linked to value creation by: ensuring that sustainability is integrated into the overall business strategy; building trust with stakeholders by being transparent and accountable; and managing risks that could affect the company’s reputation or operations. These processes work when people are engaged. For this reason, among the main corporate governance mechanisms ensuring sustainability integration, it emerges the crucial role of sustainability-linked executive remuneration. Good governance indeed involves aligning executive remuneration with the company’s long-term success not just in financial terms. Sustainability reporting on governance focuses on disclosing how a company or or-ganization manages its internal structures and processes to promote responsible de-cision-making, accountability, and value creation. Thus, governance provides stake-holders with insights into how well a company aligns its operations with sustainable practices. Business conduct is a crucial element of sustainability reporting because it reflects a company's commitment to ethical behaviour, compliance, and social responsibility. It also plays a vital role in building trust with stakeholders, ensuring the company oper-ates transparently, and mitigating risks related to unethical practices. Moreover, good business conduct reinforces a company's reputation and resilience, contributing to long-term value creation.