Why should a company also invite an under 40-year-old to join the board? What’s so good about age diversity and should young members have a say? Future Board ry’s Chairman Mari Mäki and Executive Director Lari Raitavuo explain.
Future Board, a registered association, has over one-hundred members below 40 years of age in its network, who are creating the board knowhow of the future and providing each other with peer support. These members comprise company founders, venture capital investors and family business successors in fairly equal proportion. Inviting a young member to take part in board work purely through virtue of his or her expertise is still rather uncommon, but it does occur.
“The value of board work has been understood in Finland in recent years, and companies have also started to appoint independent members. There are still boards that function simply as a rubber stamp, though. Such a board does not contribute added value to the company’s operations,” says Mäki.
Diversity applies to gender, religion, nationality, sexual orientation and gender identity as well as age. Mäki and Raitavuo both agree that it is expertise that is of essential importance in board work, and not which group a person belongs to. An older person can be innovative and a young person conservative. Diversity does, however, often introduce new and valuable perspectives to a discussion.
“Diversity affects what type of questions are asked at a meeting. Questions are highly important in board work because they challenge executive management and other board members to think. That triggers useful dialogue,” adds Raitavuo.
The young see farther into the future
What sort of thoughts, then, do young people bring to a board of directors? Raitavuo points out that the young have different networks that address different issues than those more experienced veterans are wont to ponder. Young people would consider, for instance, whether they would receive a pension when the time comes.
“A 62-year-old board member of a pension company would hardly set out to challenge the system, while a young person would want to make sure of his or her pension in 30 years’ time. A critical issue for the future of many established companies would not necessarily be addressed by the board if it weren’t for the input of young members,” Raitavuo says.
“Young people set their sights farther into the future than other board members. They expect the company to develop in way that ensures it’s an attractive workplace for future generations that value the importance of the work more than they do the money. Responsibility issues and the deployment of digitisation, typical themes in business nowadays, are areas in which young people contribute greatly,” adds Mäki.
“Even small advances, like setting up a WhatsApp group for communication between board members and the CEO, can be a great help. Traditionally, a board of directors convenes once a month, but digitisation enables liaison between meetings. A CEO can obtain the board’s support for a decision without having to convene a meeting,” explains Raitavuo.
A veteran should be last to speak
How well a young member’s voice is heard in board work depends on the member and on the more experienced members – and particularly on the chairman of the board.
“A position of standing is not given freely, it must be earned through board work. A younger member must be able to present a good supporting argument and show that he or she can contribute added value,” says Mäki. Raitavuo places responsibility on the board chairman’s shoulders:
“The chairman plays an important role in whether there’s useful interaction in board meetings. He or she must ensure that each member expresses their views. The more domineering and experienced members should exercise patience and speak last in order to be sure that everyone’s viewpoint is heard,” he says.
Responsibility means different things in different companies
If responsibility is typically an important aspect for a young board expert, how can he or she promote it in board work? Mäki replies:
“There are many themes in responsibility, such as sustainable development, social stewardship and economic responsibility. It’s the board’s task to outline what responsibility means in this specific company. One approach is to ascertain the positive and negative impacts that the company has on the community and on society at large. After that, the board can position the company so that in future it focuses on minimising its net impact.”
“Another option is to ask stakeholders – for instance, by means of a materiality analysis – what they consider to be the most important responsibility aspects. The board can then discuss targets by comparing the result to the management’s understanding. In any case, it’s important to set clear and ambitious targets that can be communicated both internally and externally. Once they’re discussed, the steps to achieve them can be implemented,” he says.
Raitavuo points out that clear performance meters are needed to monitor and improve progress. It is the board’s task to decide what to monitor and which meters to use.
“Young people have responsibility built into in their DNA. They want to know what kind of world they pass on to their children and what role the company plays in this. The board must show the path that the company is to follow.” Mäki adds a final word:
“Board action can even be a more effective way of influencing society than participating in political decision-making, because companies are a strong force for change in society. Board work can be seen as a driver towards a more sustainable world.”
Photo: Junnu Lusa
Future Board ry
What it is: A network of young people (under 40 years old), each of whom is on the board of at least one company generating annual net sales of at least EUR 500,000.
Established: In 2012, in Tampere, Finland. Founder members Tero Luoma, Heikki Väänänen and Tapio Tommila.
Membership: Some 115, domiciled around the country. Women comprise one-quarter.
Operations: Six member-organised events on selected themes each year in collaboration with a varying partner. Visits abroad every year. Also spontaneous pop-up events, reading circles and other activities organised by the members.
Mission: To create and share the board knowhow of the future.
Who she is: Chairman of Future Board’s board of directors.
Other info: Gamechanger and Acting Business Director of Ellun Kanat’s Conflict unit specialised in developing organisational culture.
Board positions: Karto Corporation, Putinki Ltd.
Education: Master of Social Sciences, University of Lapland.
Who he is: Future Board’s Executive Director
Other info: Works in Uusioperhe Group specialised in investment and financing.
Board positions: Helsinking Originals, Ensto Invest Ltd, Erimover, HELT and many growth companies.
Education: Business College Helsinki.
See also: Ingredients for a successful board.