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[ESG CFA 자격증] Ch. 5 거버넌스 요인 - 주요 특징

영국의 수정된 최근의 기업 거버넌스 규범은 2018년에 발간되었다. 해당 규범은 5개의 테마에 18개의 원칙으로 구성되어 있다. 5개의 테마로는 첫째, 이사회 리더십 및 기업의 목적, 둘째 책임 부서, 셋째, 구성과 인계인수 및 평가, 넷째 감사와 리스크 및 내부 통제, 다섯째 보수 이다. 이 테마들은 대부분의 국가에서기업의 법규로 존재하며, 감사 위원회(감사 및 리스크 위원회라고 부르기도 함), 인사 위원회(기업 거버넌스 위원회라고 부르기도 함), 보상 위원회를 주요 회사들은 모두 운영하고 있다. 감사 및 보상 위원회 인사 위원회와 마찬가지로 독립적이고 경영진이 아닌 이사들로 구성되어진다. 일부 회사의 경우 해당 위원회가 다루는 사안 중 긴급하게 처리해야하거나 진행중인 이슈를 재의결하기 위한 별도의 연관된 위원회를 운영하기도 한다. 해당 위원회들은 담당하는 업무의 투명성과 설명가능성을 주주드에게 효과적으로 제공하기 위하여 적절하게 공시하고 있다. 영국의 수정된 최근의 기업 거버넌스 규범과 함께 새로운 규범으로 이사회의 효과성을 위한 가이드(Guide to Board Effectiveness)가 발간되었다. 해당 가이드는 기업 거버넌스 규범처럼 5개의 동일한 테마로 구조화되어 있으며, 이사회 맴버들이 그들의 역할을 효과적으로 수행하고 있는가를 스스로 평가할 수 있는 질문지를 제공하고 있다. 더 나아가 기업 문화를 진단할 수 있는 질문지 역시 제공하고 있다. 가이드의 절반 이상은 첫번째 테마인 이사회 리더쉽 및 기업의 목적에 대하여 다루고 있으며, 해당 테마내에서도 주로 문화, 전략, 주요 이해관계자들과의 적절한 관계 유지에 초점을 맞추고 있다.  이사회 구조, 다양성, 효과성, 독립성 거버넌스의 해심은 사람들이다. 효과적인 거버넌스를 이행하기위한 주요 요인은 이사회에 관련 기술 및 경험을 가진 적절한 사람들을 임명하는 것과 이사회가 직면한 이슈에 효과적으로 기여할 수 있는 올바른 이사회의 문화를 만드는 것이다. BHP의 연간 보고서에 이사회의 능력과 다...

The promise of permaculture as the global experimental movement in FEW syntheses

The promise of permaculture as the global experimental  movement in FEW syntheses


1. FEWW (Food, Energy, Water, and waste)

Air and water pollution, land contamination, and landfills are the greatest threats that humankind faces. According to Culhane (2020), Dr. Ahmet Bell said that when most people discuss FEW, they sometimes ignore the waste that is crucially affected by sustainability challenges of increased urbanization, consumerism, and quote.

With regard to FEW NEXUS approaches, Fernandes Torres et al. (2019) studied that there are models that add or obliterate the elements (See Table 1). According to Table 1, the study of FEWW NEXUS published just one among 304 studies. Furthermore, without the food, energy, and water elements originally considered, the elements of land, climate, environment, and climate are used at least more than one. However, the element of waste is included among the other elements. For example, wastewater, waste-landfill, and waste food. Table 1, shows us that the waste element is well-considered independently of the FEW NEXUS studies, but waste is not excluded from most FEW NEXUS studies. 

Table 1, Nexus elements considered in research

Source: Based on the Fernandes Torres et al., (2019), the author reinterprets and demonstrates. The initials Ec, Ecs, Ev, Ca, and Wa is renamed for more legibility with the same initial.

There are some reasons that people have not consider the element wastes independently. First, the waste is the subject to be eliminated, so there is no need to endeavor the word for waste. On the other hand, people are trying to eliminate the wastes, and there are no such things anymore, so the word of wastes is not necessary to include in the FEW NEXUS. Second, on the linear thinkers that so-called traditional think (Ghebremichael, 2020) aspect, the waste is not involved in the solution, since they only consider the cause and consequences, or focus on the symptom underlying problems. For example, if there are lots of air pollution since the industry in urban areas, that area should use the eco-friendly machine. If the system thinker treats this matter, they will check the event and scrutinize the pattern, structure, and mental model. 

System thinkers seeking the world in the aspect of everything are dynamically interconnected and see the planets are in the multi-dimensional care the wastes when they consider the FEW NEXUS. The reasons are, initially, they use a word as a noun that defined the new function in the system. And the system thinkers always understand that the whole things and contents are not still more significant than the sum of its parts. Furthermore, it should focus on the undermined value of waste that is recycled as energy and improves the ecosystem restoration. Since the prevalence of biogas, which can be produced by food and organic waste, waste is in the spotlight in the NEXUS thinking (Daniel et al., 2019). For these reasons, the system thinkers consider that waste can become an input in a system. And it is one of the important tools for sustainable development and the FEWW NEXUS approach.

2. System thinking

System thinking is used widely, such as science, management, business, and law. Nowadays, system thinking is considered more deeply in the sustainability area since systems thinking requires us to understand that while there is only one Earth, it is composed of a multitude of subsystems all interacting with each other (Anderson et al., 1997).

Donella Meadows contends that the natural systems thinkers in the FEW NEXUS are applied to the system concept by setting experiments and simulating with the computer or mathematically to figure out some event’s dynamic behavior and suggest fundamental solutions. Meadows also mentioned that all the events and parts have interrelationships in new ways. 

System thinking is a discipline itself and an important figure to figure out the solution based on the FEWW NEXUS approach. More specifically, the FEWW NEXUS approach is the system thinking. Since every part is all connected and has interrelationship, on the aspect of the waste, waste is the subject of elimination. It can also be the source of exceeding the limits to growth. Meadows asserted that system thinking developed from creative thinking, which is emerged from the conjunction of ideas and knowledge. For example, some creative ideas are from Native Americans likes Sufi and other ancient wisdom, which is built by a multitude of anonymous. Based on this approach, system thinking imparts the transcending disciplines and cultures. When system analysts choose overarching concepts, they formalized the variety of fractures of knowledge. Understanding and applying to system language also one of the important parts. 

Thinking principles are able to categorize into three conditions. There are Reductionism, Determinism, and Holism. Reductionism is thinking whole behavior equal to the sum of parts. This principle was introduced by Rene Descartes, who is a mathematician and philosopher. Determinism is thinking as everything is predictable and finite. Holism, which meaning all and whole in Greek, is whole equals to the product of interactions. Among the principles mentioned above, System thinking is a form of Holism because all part is interacting, but not equal to the whole.

Traditionally, the thinkers usually solve the problems by Reductionism, Determinism. The difference between traditional and system thinking is how to see the event. Linear thinking is sometimes to figure out adequately; for example, lack of gas makes cars immobile. However, most of the cases are not fit well since most of the systems are intercourse. The results are affected by a multitude of factors, such as allaying mosquito populations. 

To do the system thinking, consider the events, influences, effects, and metamorphose of influences and think as holistic. Unlike linear thinking, system thinking does not have a solid solution and solves the problems diversity and prevents more efficiently for the same things happen, such as firefighting. I categorized the difference between linear and system thinking below Table 2. 

Table 2, The differences between the linear and system thinking

Source: Based on the Fernandes Anderson et al. (1997), the author reinterprets and demonstrates.

The strength of the system approaches is overwhelming the number of limitations. First, finding patterns raised the possibility of future crisis prevention (Ghebremichael, 2020). Second, provide more accuracy about the real-world working mechanism (Ollhoff et al., 2002). Third, more efficient to react to uncertainty than linear thinking or reductionism and determinism. Fourth, Fewer side effects, so-called negative externalities. 

The limitation of system approaches is fundamental problems of control (non-reducible complexity), prediction (not-knowing of evolutionary emerging features), and of incomparable domains of knowing (Jonas, 2014). However, this limitation may be overcome by Jonas (2014) suggestions on reducing the effect of problems. First, we need to recognize what we are looking at and how it is chaotic in the real world. Second, to figure out the patterns and establishing the scenario, has to find an adequate future uncertainty level. Third, lead to participating in the stakeholders, observers, and users. Lastly, build a nexus that may assist in sharing the ideas and wrought the epistemological framework.

3. Simulation

There are commonly used overarching concepts. Such as Limit to growth, Tragedy of the commons, Fixes that fail, Success to the successful, Shifting the burden, and Eroding goals. These overarching concepts have various features and strengths. To illustrate the system and loop, the author used LOOPY (see the reference). Other programs illustrate system and loop like Venism (see the reference), System, and Insightmaker.

1) Limit to growth

The limit to growth is kept trying to grow, but there is no actual growth rate since the limiting condition. For example, if some sustainable technology has a limiting condition, the mechanism would act like Figure 1. To overcome this trap, need to look for limiting factors, remove them, and don’t push harder on growth, and beware of doing more of what “worked” in the past.

Fig. 1. Limit to sustainable technology growth

Source: The author established the example, and simulate it by LOOPY.

2) Tragedy of the commons

More harvesting leads to the inclination of benefit; however, all resources are exhausted because of the absence of responsibility on the resources. For example, if there are individuals A and B who use the same resources that are free to invent new sustainable technology, both keep using the resources unless limited. Then, the resources will be exhausted quickly, then both A and B will not keep inventing new sustainable technology. Some strategies evacuate from this trap. First, Develop a shared vision and measurement system or final arbiter. Second, Promote the availability of additional resources to control the use of resources by A and B. 

Fig. 2. The tragedy of the commons in sustainable technology invention

Source: The author established the example, and simulate by LOOPY.

3) Fixes that fail

The meaning of fixes that fail is worse than before since the focus on symptoms rather than the underlying real problem and time delay makes it difficult to see unintended consequences. And often, the consequences are a much bigger problem than the original. For instance, let the individual act a fixed way when trying to invent a sustainable technology. If some problem symptom erodes, the fixed action will make unintended consequences. In the end, the problem will be worse, and an individual’s sustainable technology will be spoiled. To solve this failure, try to identify the unintended consequences in advance, manage or minimize the impact of unexpected long-term consequences, and find different solutions to the original problem. 

Fig. 3. Fixed action that fails

Source: Author established the example, and simulate by LOOPY

4) Success to the successful

The system consists of two reinforcing loops that interact. When individual A keeps spending time inventing new sustainable technology, individual A will keep and more successful in inventing sustainable technology since accumulated time to spend on sustainable technology. To overcome this trap, need to Identify shared resources and balance the distribution, link the entities for a win-win outcome, disconnect the two reinforcing structures to make them independent of the allocation of shared resources, and expand available resources.

Fig. 4. Success to the successful invention

Source: The author established the example, and simulate by LOOPY.

5) Shifting the burden

The structure is composed of two balancing loops and one reinforcing loop. Using the symptomatic solution → alleviates the problem symptom → reduces pressure to implement a fundamental solution → , but side effect undermines the fundamental solution. To solve problem symptoms, choose one among the short-term fix (symptomatic solution) or long-term fix (fundamental solution, have a delay). Many people will choose a short-term fix, but it is not solving problems eventually. The solution for avoiding this failure is to ask if the individuals are dealing with the symptom rather than the real cause and focus on the fundamental solution and symptomatic solution only to gain time. 

Fig. 5. Shifting the burden for sustainable technology

Source: The author established the example, and simulate by LOOPY.

6) Eroding goals

The system consists of two reinforcing loops. If there are gaps, it will make pressure to ease the standard, which will ease the standard. Them the gap is much larger compared to real status. However, if the gap is existing, the individuals are trying to reduce the problem, and they do. After that, the current status, which is allayed problems, will decrease the gap. If the gap is existing on the aspect of sustainable technology, then the sustainable technology standard will be decreased. After that, the environment will be worse than before. However, when developing sustainable technology for reducing pollution, the current status will be better. As a result, the gap between the real-world and the technology standard's pollution level will be smaller. First, there are strategies when current performance is below standard. Second, focus on improving performance rather than lowering the goal. Lastly, disconnect the feedback from the pressure to settle for less to the desired state.

Fig. 6. Eroding sustainable technology goals

Source: The author established the example, and simulate by LOOPY.

4. Conclusion

According to Culhane (2020), Dr. Ahmet Bell said that when most people discuss FEW, they sometimes ignore the waste that is crucially affected by sustainability challenges of increased urbanization, consumerism, and quote. System thinkers seeking the world in the aspect of everything are dynamically interconnected and see the planets are in the multi-dimensional care the wastes when they consider the FEW NEXUS. The reasons are, initially, they use a word as a noun that defined the new function in the system.

To do the system thinking, consider the events, influences, effects, and metamorphose of influences and think as holistic. System thinking is a discipline itself and an important figure to figure out the solution based on the FEWW NEXUS approach. Thinking principles are able to categorize into three conditions. There are Reductionism, Determinism, and Holism. Unlike linear thinking, system thinking does not have a solid solution and solves the problems diversity and prevents more efficiently for the same things happen, such as firefighting. System thinking is used widely, such as science, management, business, and law. Nowadays, system thinking is considered more deeply in the sustainability area since systems thinking requires us to understand that while there is only one Earth, it is composed of a multitude of subsystems all interacting with each other. 

There are commonly used overarching concepts. Such as Limit to growth, Tragedy of the commons, Fixes that fail, Success to the successful, Shifting the burden, and Eroding goals. These overarching concepts have various features and strengths. 

<Reference>

Anderson, V., and Johnson, L. (1997). System thinking basics. Pegasus Communication.

Culhane, T. H. (2020). Module F2: The promise of permaculture as the global experimental movement in FEW syntheses.

Fernandes Torres, C. J., Peixoto de Lima, C. H., Suzart de Almeida Goodwin, B., Rebello de Aguiar Junior, T., Sousa Fontes, A., Veras Ribeiro, D., ... & Dantas Pinto Medeiros, Y. (2019). A Literature Review to Propose a Systematic Procedure to Develop “Nexus Thinking” Considering the Water–Energy–Food Nexus. Sustainability, 11(24), 7205.

Garcia, D. J., Lovett, B. M., & You, F. (2019). Considering agricultural wastes and ecosystem services in Food-Energy-Water-Waste Nexus system design. Journal of cleaner production, 228, 941-955.

Ghebremichael, K. A. (2020) Basic Concepts of the Systems Approach An Introduction to General Systems Thinking. The University of South Florida.

Insightmaker, https://insightmaker.com/

Jonas, W. (2014). The strengths/limits of Systems Thinking denote the strengths/limits of PracticeBased Design Research. FormAkademisk-forskningstidsskrift for design og designdidaktikk, 7(4).

LOOPY, https://ncase.me/loopy/v1.1/

Sysdea, https://sheetless.io/sysdea

Venism, https://vensim.com/download



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