Owners, authorities and other stakeholders place ever stricter requirements on the board of directors and their work, as well as on the competence of the individual board members and the composition of the board of directors. These requirements pertain to expertise and experience, as well as to attitudes and values. The board of directors is expected not only to safeguard the interests of the owners in the long and short run, but also to add value to society at large. To accomplish all this, the board of directors needs to know and understand the company culture. All in all, a much closer dialog is required between the board of directors and the organisation than what was previously considered right and reasonable.
With an every closer spotlight on the role and responsibilities of the board of directors, the task of recruiting board directors and ensuring that they meet quality standards, has grown considerably more encompassing and time-consuming than it was a few years ago. More attention is devoted to who proposes the candidates for board directorships, on what grounds, and on the basis of which processes. The question is no longer whether the company HAS a nomination committee, but HOW the nomination committee operates.
All in all, Norwegian board directors represent more diversity with regards to age and gender and have more formal education than their counterparts elsewhere in Europe. This diversity does provide the boards with a broader basis for their decision making, but the potential of converting this diversity into strong and efficient governance is still largely untapped.
Boardroom work is in a state of constant development. When we established the Norwegian Institute of Directors three years ago, we wanted to provide board members of listed companies with an arena for the exchange of ideas and experience. Since, we have discussed a number of topics, in open and valuable debates. The feedback provided by members is that the interaction and discussions are valuable in and of themselves. By institutionalising the knowledge and expertise shared by members and facilitators in our meetings, the Norwegian Institute of Directors hopes to contribute to further professionalising the work of boards of directors.
As stated one of our members: “As a board director, this is one arena where you just have to be – you cannot afford not to.”
Oslo, April 2012
Turid E. Solvang
Managing Director, Norwegian Institute of Directors