A homogeneous board inhibits growth

Since 2006, Petra has worked as chairman of the board in owner-led private growth companies. As chairman, she works closely with the CEO and owners, where in her capacity as chairman she can adapt the work to what the company needs. Petra believes that as chairman, it is crucial to understand and use the ’brain collective’ in the boardroom. To get a high degree of effectiveness of the board's value creation, the owners need to be clear about what they want with the company and preferably draw up an ’owner's directive’ that the board can interpret but also be able to work together to develop it. It is on the owners' agenda to clearly define the mission for the board so that the board can translate ownership into strategy. Petra meets many owners who are busy growing their companies and only sometimes take the time to work on creating a diversified board. Many need help finding suitable candidates or how to get amore varied commission. Assuming the use of a recruiter to staff it with the skills required to create dynamics and heterogeneous group composition is something she therefore recommends.

- ”Many founders and owners in so-called scaleups want a seat on the board, and often, they make up the board entirely for quite a long time in the company's development. Once you bring in a member, you usually bring in people from the industry instead of bringing in members with the knowledge and skills needed to build the business further. It is good if you initially bring in an external board chairman and then continue to recruit so that there is a balance between external and internal members. A risk with bringing in only one external person on the board is that it creates a power relationship that means you don't challenge each other enough”, clarifies Petra.

Another way the chairman can get the board to get into the strategic work more quickly and get the board to become a high-performing team is to give the new members a proper introduction. To provide a historical perspective and discuss the board's expectations in general and that new members can contribute to the whole.

One arrangement could be to have a board kickoff per year outside the planned board meetings. A meeting is about getting to know each other as individuals, what each should contribute, what expectations they have of each other and how to translate the assignment/owner directive into practical board work in the coming year.

- ”Clarity is needed at all levels. Focusing on the right things facilitates collaboration and decisions. The fact that the board does not have shared values ​​or philosophies can lead to the board engaging in the wrong things. In the long run, the board then becomes ineffective and risks being inoperative. To avoid this, invest time, in the beginning, to get to know each other's experiences and strengths and then discuss how this can be translated into practical board work with a focus on value creation based on the will of the owners”, says Petra.

Petra emphasises the board's chairman's responsibility to move the company forward following the strategy. To avoid rigidity and too much focus on finances, control and follow-up, she recommends letting the dialogue in and using the brain collective. With input from others on the board and CEO, the chairman owns the agenda and decides which issues are to be prioritised.

- ”I see so many chairmen who cannot do their job. It usually involves looking more in the rearview mirror than looking ahead. It is essential that the chairman can balance both existing and future business”, she says.

It is clear that Petra is passionate about board work and is happy to share her long experience. Time is running out, and in conclusion, we ask her for the three best pieces of advice for creating practical boardwork:

• Bring in an external chairman who works closely with the CEO and owners.

• Create a heterogeneous group that challenges and uses the brain collective.

• Look ahead –don't spend the time in the board meeting reading reports.

About the survey "Board context in growth companies."

The board role is 3 out of 4 subtopics that summarise the results from Evolvefy's survey in 2021. The respondents hold positions such as CEO, Investment Manager and CFO or are board professionals in growth companies.

Evolvefy helps entrepreneurs and business leaders in growing companies build financial structural capital to realise their growth plans. When a company grows, the finance function shifts, and the need for CFO expertise depends on the company's phase. This is where things can often go wrong and become very costly. That's why we exist. Our concept is based on flexible and tailored solutions. We offer Growth Analysis, CFO Interim, Recruitment, Risk Management, and Accounting Services.