Seven Essential Tips for Board Chairs to Ensure Success

March is recognizable by the rapidly lengthening days and the annual general meetings held by companies. One of the most crucial decisions made during these meetings is the election of the Board of Directors. During this time, many boards commence with their new compositions.

How should the Board Chair act to ensure the new board gets off to a good start and succeeds in creating value for the company? Here are seven tips:

(1) First and foremost, the chairperson should clarify the company’s ownership strategy with the shareholders. A good ownership strategy defines the company’s values, growth targets, risk tolerance, and dividend expectations. It forms the mandate and boundaries within which the board’s responsibilities and company strategy must operate.

(2) At the beginning of the board’s term, it is essential to lay the foundations. Get to know each other personally and agree on operating methods and goals. An example can be taken by googling Risto Siilasmaa’s Golden Rules, which the Nokia board collectively wrote when Siilasmaa started as chairman.

(3) During the organization meeting, the board’s annual clock is locked in. All meeting dates and themes for the board's term are agreed upon. A well-thought-out annual clock ensures that the board delves into all topics important to the company throughout the year.

(4) Meetings led by a professional Board Chair start and end on time. Decision-making matters and deep-dive themes are at the top of the agenda, taking up 80 percent of the meeting time. Reporting follows afterward. The chairperson does not dominate the discussion but enables others to shine.

(5) An important task of the board is also to support the company’s management. A smart board not only challenges the CEO but also remembers to encourage them. No CEO wants to listen to "boardsplaining." The Board Chair meets with the CEO one-on-one at least every other week and acts as a sounding board for the CEO. During these meetings, the chairperson focuses on listening, not talking.

(6) A good board also works outside of meetings. WhatsApp should be active with relevant and sometimes irrelevant discussions, and dinners organized a few times a year help maintain trust and team spirit.

(7) The Board Chair ensures that the board conducts an honest self-assessment annually and strives to continuously improve its operations. Everyone on the board understands that the composition of ambitious boards is updated regularly.

Good luck to all the boards starting this spring! Create value, make good decisions, and learn new things. And remember to have fun too!

The text has been published in Kauppalehti on 20 March 2024.