Putting together the best possible board

At its best, a good board is a company's most valuable team: professionals who trust each other, have the courage to envision, make carefully considered, informed decisions and build scenarios to support decision-making. What kind of guidelines can be followed to find the best composition for the board?

The review should start with the current situation of the company. Do we need a reform team, a renovation or a subtle sparring partner? Here, too, the work on ownership strategy must be done first – the will of the owners dictates what the board is supposed to do. Therefore, clarifying the ownership strategy is the basis for the success of the company.

Different skills for different companies at different stages

A start-up, a growth company, a company in crisis and an established company need different competences in their board. Particularly at early-stage companies, specific knowledge of the company's industry or a particular function may be important, whereas larger companies will also require a broad range of management and board experience.

There are three levels of board obligations:

1. Ensuring legality. As a minimum, the board must have knowledge of good corporate governance, risk management and accountability management.
2. Ensuring effectiveness. The board must be able to develop the business, starting with sparring with the CEO and financial management (outturns, forecasts, key performance indicators) and clarifying the competitive advantages of the business.
3. Ensuring the future. The board must be able to lead the strategy work together with the CEO, so the board should have experience of appropriate strategy frameworks and processes.

In addition to all this, the board must be able to continuously improve its own work.

A diligent recruitment process brings the best results

When electing board members, it is good to follow the same thinking as in other recruitment. First, one must define the required competences, breaking them down into the necessary knowledge, skills and motivation. It is then a good idea to consider what the company can offer potential board members: adequate compensation, an interesting company, competent colleagues and, most importantly, interesting development opportunities.

In addition to brilliant individuals, it is appropriate to look at the board as a whole. Factors to consider include work experience, educational background, age, gender and ethnic background. Further to industry expertise, the board should have experience in legal, financial and human resources management. It may also be beneficial to include more exotic backgrounds, such as a behavioural scientist, historian or humanist.

The chairperson bears a major responsibility

Without a competent, firm and wise chairperson, even the best board is adrift. The chairperson is the glue of the board, whose task is to create a safe atmosphere in which board members dare to voice their dissenting opinions and express their visions. The role of the chairperson is to ensure that the discussion remains value-added and the meeting stays on schedule. The chairperson is also the CEO's most important work partner, and the success of both of them is measured by how he has contributed to the success of others. The success of the board is finally measured only by how well the CEO and the management team have achieved their goals.