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Boardroom revolution

For too long, board directors have been dragging their feet in making crucial changes with regards to their board’s role, composition and work processes. Geopolitical unrest, digitalisation and climate change didn’t seem to escalate any sense of urgency. And then came Covid!

One shouldn’t use the word POSITIVE, but at least I’d say that one GOOD thing the pandemic has brought about, is the total turn-around that was forced to take place in boardrooms globally.

With the speed of light, board meetings shifted from the comfort of the cosy board rooms to – literally – open space. And, as we are slowly adjusting to the fact that some things have changed forever, it is high time to discuss the role the board should play, how it should work and how it is composed. And it’s urgent! This is what I call the boardroom revolution!

For example, the UN Sustainable Development Goals (SDGs), which set out to create a better and more sustainable future for all, can only be reached if board directors and top managers take on a leading role.

If they choose not to lead, these same companies will have to be governed in a far more volatile and unpredictable world than we have seen to date. Companies are expected to be accountable, not just to the shareholders, but also to the society in which they operate. This mega shift requires a whole new set of skills, and, even more important, a shift of mind-set of those in charge.

The traditional capitalistic growth model, that has been a zero-sum game for people and the planet, is increasingly being questioned. And fortunately, the general consensus that the business of business is not just business anymore, is actually embraced by a growing number of corporate leaders.

Norway’s Approach

The Norwegian government has decided that the SDGs are the framework through which national, regional and global challenges are to be addressed. Furthermore, the UN Secretary General has re-appointed Norway’s previous Prime Minister, Erna Solberg to co-lead the UN Advocates Group for SDGs.

This places Norwegian companies in a unique position to take on a leading role. Yet, if this springboard is to be taken advantage of, sustainability needs to move higher up the board agendas. And, if boards don’t listen and act, regulators will do what regulators normally do; they will regulate.

That brings me to the European Commission’s recently closed public consultation on sustainable corporate governance, which worries the leaders of the Nordic employers’ organisations. In a letter published in the Financial Times, they claim, among other things, that the proposal is detrimental to the companies’ ability to operate efficiently.

Their biggest concern is that board members will be held accountable by ‘an undefined group of stakeholders’. In an interview in rett24.no, Professor Beate Sjåfjell, chair of the EU SMART project, characterises the reactions as ‘premature and emotionally charged’.

It is also worth noting, though, that in the responses to the EU consultation, while NGOs are predictably in favour of most of the proposed measures, individual companies tend to be more positive towards regulations than their business associations.

From my perspective, one of the most interesting aspects of the consultation is in regard to enhancing sustainability expertise on the boards. Quoting the summary report: “Overall, respondents considered a requirement for the board to regularly assess its level of expertise on environmental, social and/or human rights matters and take appropriate follow up.”

Altogether, around 40 per cent of the respondents would like to include consideration of such expertise in the nomination processes, and a similar number would like to require such expertise among a certain number of board directors. While corresponding numbers for NGOs are 84 per cent and 69 per cent, I would hold that this is a strong signal to investors, nomination committees, as well as board directors themselves to get up to speed on sustainability competence and integrated thinking.

I’m also pleased to note that my good friend and chair of FutureBoards advisory board, the rock star of corporate governance, Professor Mervyn King is strongly in favour of the proposed measures. And he is in good company with Paul Polman, former CEO of Unilever, and Kerrie Waring, CEO of International Corporate Governance Network (ICGN), in their ‘call to action on sustainable corporate governance’.

In Norway, the government has taken action through the white paper on its ownership policy, which explicitly states that companies in which the state has ownership interests must have an overall plan for sustainable value creation. Furthermore, it is clarified that this plan must be specified in clear goals and strategies for the companies.


Additionally, the Norwegian Committee for Corporate Governance (NUES) has recently made ground-breaking changes in the recommendation for good board work in companies listed on the Oslo Stock Exchange.

The amendment clearly states that: “The board of directors should define clear objectives, strategies and risk profiles for the company’s business activities such that the company creates value for shareholders in a sustainable manner. When carrying out this work, the board of directors should therefore take into account financial, social and environmental considerations.”

It is not enough, but it is a big step in the right direction.

From an investor point of view, these proposals for increased professionalisation in the boardrooms are welcomed. Active investors have long been involved in companies’ strategic and operational work to improve environmental, social and corporate governance practices. This is done, not just because it’s the right thing to do, but also because most investors now know that more sustainable companies create greater value for shareholders. To varying degrees, companies are willing to listen, but with clear rules and requirements from the authorities, it is believed that progress can come faster.

Nevertheless, a recent survey conducted among the board members of the 75 largest listed companies in Norway, Sweden and Denmark shows that boards lack the necessary knowledge and experience related to sustainability.


Nevertheless; the key message is that change is not going to happen by itself, and regulation seems, unfortunately, to be the key to unlock the boardrooms for women. In turn, that will, hopefully, open the doors to board directors from other walks of life than the usual suspects.

So, if you are planning for your company to survive and thrive in what the United Nations has dubbed ‘the decade of action’, you’d better start shaking up your board!


Ethical Boardroom is a premier website dedicated to providing the latest news, insights, and analyses on corporate governance, sustainability, and boardroom practices.

Ethical Boardroom is a premier website dedicated to providing the latest news, insights, and analyses on corporate governance, sustainability, and boardroom practices.


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