Q&A Profile: Per-Allan Karlsson – AltoPartners / Novare Partner, Board Member and Chairman for Executive Search (Sweden) : Board Practice & Assessments Novare Executive Search

We profile Per-Allan Karlsson as Partner, Board Member and Chairman for Executive Search Novare, our AltoPartners alliance partner in Sweden. With over 20 years of experience as an executive search and management development consultant, Per-Allan’s main areas of focus include President/CEO recruitments, board member placements and assessments of management groups and boards.

Per-Allan shares his insights into the current state of board member search activity and the ever-increasing importance of conducting board and management group assessments.

Q&A with Per-Allan Karlsson: Board Member Search and Board Assessments – A Swedish Perspective

What does Board Diversity mean in Sweden/Nordic countries in general?

In general, diversity means having a good mix of gender, with the target at 40% female board members. We are not there yet but on a good track. In Norway, this is already a requirement according to law.

What are the secrets to your/Novare’s success when it comes to the quality and quantity of board recruitment assignments and board assessments that you do?

We have had a long term focus on building the relations with the right people. It is not more complicated than that. This starts with doing excellent search work. Quality and quantity of board members comes from all other interviews. You need to know people. Not only know of them. You need to have a personal opinion and relationship. Your candidates are in different boards or will soon be there and it is important to maintain close networks with them. One piece of advice I can give is to be supportive to Chairmen, they are quite alone and you can become a valuable advisor and confidante to them.

What defines a successful, well-functioning board?

In Sweden, and across the Nordic countries, we typically have independent boards, where the CEO reports to the board of the company. A well-functioning board will work as a team, representing different areas, geographies etc necessary to support the CEO and the strategic agenda. I would say the most important part for the board to play is to make sure the company has the best possible CEO in place and then support him/ her in carrying out the corporate agenda. I am also a firm believer that a board will benefit from being diverse in its composition because that diversity brings with it interesting and new ways of thinking, insights into different industries and markets as well as the ability to be innovative in thinking through new ways to support the CEO’s strategic agenda; all of which can aid the company to remain relevant and have the ability to adapt and change.

Have the nature of your board assignments changed to match the changing business/economic environment and have your assignments changed to reflect the changes that companies are going through?

I would definitely say yes to both questions, but I would say that the changes companies are going through have tended to influence the profiles a little bit more. In Europe, and in the Nordic region in particular, the diversity requirements (for instance the male / female mix) have dominated the discussions and resulted in major organisational and board changes. Changes within the company and changes in strategy require new skillsets and experience introduced into the board. A good example is the digital development affecting the businesses; these new developments have brought about changes to business models and require deep strategy discussions. If you don’t add someone with that experience it will be left out in the discussion and the company runs the risk of becoming stagnant and not evolving as times change.

Have you found that the structure and demographics on boards have changed to reflect the fact that companies have had to rapidly change to remain relevant to today’s consumers/employees?

Yes of course! If a company does not adapt and change it is no longer relevant and it will soon not be an appealing place to work nor will it find commercial success in the future. And as said above, the digital transformation is an obvious example. While another requirement that has been a major topic to address in order to be relevant is corporate social responsibility (CSR), especially as the so-called “millenials” are deeply concerned about a company’s track record in this area and are increasingly basing their employer and brand consumption choices on this area.

** How have you helped companies evolve and grow through strategic board appointments?**

This is what we do with every board recruitment assignment because we understand the complex dynamics of a board and company and we are able to advise our clients to find the best people, with a unique and context appropriate skillset to help their companies grow. We add value to our clients because of our in-depth understanding of the market and our ability to source interesting candidates. To give you a few examples:

• A bank lacked someone with experience from small business world. They lacked that in the strategic agenda. We helped them find it.

• Same bank had a big business in Germany but no one with German experience and presence in the business community.

• A global board of a direct sales organisation needed to strengthen their strategic branding , marketing and digital capacity

• A global investment Company (close to us) has changed the board composition and changed CEO to address the future needs in order to continue to grow within new business areas.

Have you seen any notable changes in the way board member placements have taken place over the last 10 years?

During the last 10 years the nomination committees have moved from only discussing “people they know” to being much more structured and discussing a broader spectrum of professionals. Large pension funds are today more active and have dedicated resources involved in selecting candidates.

What is Board Assessment?

In Sweden, although it is not a law yet, we have a strong ethics code for boards that listed companies should follow. You can decide not to follow but then you have to say why. So everyone follows the code. At a basic level it is the annual process the Chairman initiates to evaluate the board and its contribution to the effective functioning of the company. These assessments can be done in different ways, with the most common being in the form of a questionnaire, which helps the Chairman gather information about the quality of the board, the effectiveness of the board composition with the aim of identifying any gaps.

We, as executive search consultants, often facilitate these assessments for them with personal interviews. With our experience we could get a non-biased evaluation and capture signals on the dynamics in the board room. In order to benefit from all experience in the board room you need a dynamic discussion. Answers from board members will stay anonymous. If you also include a personality test based on for example Belbins role definitions you will get an excellent tool for developing group dynamics. It will give the chairman / nomination committee extraordinary information for future recruitments to the board. The information gathered from these assessments will aid in development and changes needed in the composition of the board, for the chairman to changes his style, to address questions that are not covered in the agenda but board members think they should, and for nomination committees to develop search criteria for next nomination.

Are some industries/sectors embracing change and diversity at a board level more quickly than others? If so, which are those industries?

The consumer industry has been more adaptive, companies with an end-user focus need diversity to address customer needs and remain relevant to customers. But, government and state authorities has been excellent role models in adapting full diversity, where they have often prioritised diversity over relevant experience, and corporations with strong owners that understand the business value of diversity have also led the change.

About Per-Allan Karlsson

Per-Allan joined Novare in 2009. Before joining Novare, he worked for ten years at Heidrick & Struggles as CEO of the company’s Swedish company and European manager for the IT/Telecom and Professional Services industries. Per-Allan has more than 20 years of experience as an executive search and management development consultant. He has a broad background in IT, sales and management. Per-Allan’s main areas of focus include President/CEO recruitments, board member recruitments and assessments of management groups and boards.