The Directors’ Institute Finland (DIF) is a leading forum for developing corporate governance and standards. It focuses on enhancing the professional skills of its members and promoting good governance for Finnish companies.
Recently, MU was invited to the DIF and discussion around future Board skills requirements and the value creation it brings, followed by speeches from Board professional Sanna Suvanto-Harsaae and Vaisala's Board Chair Ville Voipio. During the forum, Teemu Tiainen, Partner MU also presented the results of a recent DIF member survey, where more than 100 board professionals participated.
The DIF and MU member survey explored the Board's strengths, areas for development, and focus points. According to the survey results, the Board's strongest areas were business and its management, industry expertise, as well as growth and development. The areas requiring the most development were also growth and development, as well as technology and data economy, and succession planning.
Teemu Tiainen, Partner MU:
“Changing and selecting the CEO is among the most important decisions at the board level. Despite this, the survey showed that succession planning emerged as a significant area for development (35%). The need to invest in succession planning is not evident in practice, as the expertise remains at a relatively low level in the boards' self-assessments. The most important tools for the board's value creation identified by respondents were the board's collective expertise (75%) and group dynamics (45%)”.
During their respective keynote speeches, Sanna Suvanto-Harsaae highlighted the importance of succession planning for Boards and Ville Voipio also emphasised the need to consider climate change from a forward-looking perspective to ensure that businesses are sustainable and profitable in the future global landscape.
Sanna Suvanto-Harsaae:
"The Board is irrelevant if the leadership is not right," Suvanto-Harsaae stated. The idea of having the right person in the right place at the right time must be reflected in the strategy. For instance, a major strategic change is not possible without changing the organisation's structure. The Chairman should always have a brief ready for a potential CEO replacement, as the search might need to be activated quickly without warning. It is also necessary to be prepared for situations where a key person, in the worst case, the CEO, "gets hit by a bus."
Ville Voipio:
“We face a dual transition: a sustainability transition and a digital transition. Both require new skills and mindsets, change the costs of assets, require a lot of data, and create new business opportunities. There is certainly uncertainty and difficult choices ahead.”
As part of our Board&CEO practice, MU executes systematic surveys around Board work and best practices. The trends and findings of this survey were not that surprising. There is still a lot of work to do e.g. in CEO Succession Planning and developing diversity on the Board and at the C-level.
If you want to hear more about the survey, or our services do not hesitate to contact us. We are also eager to hear about your best practices to be shared with other Boards.
For you who wants to read more about the event visit the DIF homepage (in Finnish): Hyvä hallitus luo katseen tulevaan ja huolehtii seuraajasuunnittelusta | Directors’ Institute Finland (dif.fi).