Media Coverage: Albert Froom, former AltoPartners Chairman and current Managing Partner Leaders Trust International - Netherlands, the exclusive AltoPartners member firm in Netherlands, discusses the value of Supervisory Boards

This interview was first published in the Polish version of CEO Magazine. To read the original article, click here

Why are “Supervisory Boards” currently a hot topic within the AltoPartners alliance?

Close cooperation between partners, like between Corinne Klajda, Managing Partner from Accord Group Poland and myself from Netherlands, opens up new discussion avenues on relevant topics and industry trends. In the case of Supervisory Boards, we want to take our clients and candidates away from the traditional view of Supervisory Boards and rather shift the discussion to a new paradigm and new purpose of these Boards.

What are the benefits of having a Supervisory Board?

The single biggest added value is the ability to supervise and advise the executives and make sure things that must be done are done. It is essential to “walk the talk”, check plans and actions taken, and make sure that a clear strategy is created and communicated throughout the company in the right way.

Supervision is also about the way things are done in the company. Perhaps this is even more important than what is actually happening. Nowadays society, public, activists and stakeholders will be on top of all issues. Issues ranging from sustainability to union disputes on salaries, diversity, supplier regulations and activities, quality delivered by the company, safety of the products etc are amongst some of the key focus areas to be aware of and have an action plan for.

Within this supervision, the members also need to consider the questions:

Are the executives managing the company financially?

Are they reaching their targets?

Are they paying a reasonable dividend to shareholders (listed and non listed)?

And, importantly, does the company serve their clients with the right products, the right services and at the right prices?

Does the Supervisory Board act as a coach and advisor to the Executive Board?

The Supervisory Board member is the sounding board for the executives in the Board, as well as the “mirror” for the less welcomed “feedback”. The most important way for the Supervisory Board member to create added value is in his/her role, is as a coach and advisor to the executives. It is in this role where experience is required from the Supervisory Board member and that is why often those are former or present CEOs holding the role.

Listening, observing, questioning, questioning and again questioning. Is the company doing well? Is the team of executives of the right composition? What if you have a great CEO but the wrong team members around him? This is one of the reasons why AltoPartners are often asked to do an assessment of the leadership team – to ensure the composition is right, that all the team roles are filled in the sense of contribution of the individual, but also that power is organized well between the executives.

After the thorough questioning, you should be able to offer perspectives, advise, and various options, and you should be able to answer the questions: “Do we know enough about what is happening around us? How do we read those events? Should we consult experts to help us read what is happening around us? Do we do the right things and do we do right things right?”

What are the biggest issues /trends impacting Supervisory Boards?

Firstly, there is more pressure to maintain independence. There is a delicate balance between involvement and independence.

Secondly, corporate scandals have created more societal recognition for the relevance of supervision and the need for Supervisory Boards, therefore giving stakeholders the opportunity to directly address the board members.

Then, increasing relevance for diversity in the broader sense; this includes appointing more youth in the non-executive boards because many issues today are related to technology or disruptive new business modelling, thanks to Big Data and digitalization.

Finally, more assessments will be used in the future before entering the Supervisory board role, looking with that assessment for “content” and “integrity” and the additional needed “team roles” in the composition of the Supervisory Board.

As executive search consultants, we will be looking for experienced candidates that are willing to commit lots of time and effort into their roles. The pressure will rise on Supervisory Board members. The right composition of personalities, expertise and intuition will let a Board like that excel.

---

About Albert Froom

Graduated from Utrecht University with a Master in Commercial and Corporate Law (LLM). Completed afterwards the AMRO Commercial Banking Course/Chase Manhattan International Banking Course.

Held a variety of commercial positions within the International Institutional Banking Division of AMRO Bank.

Moved into management roles with Hartford Insurance (ITT), before becoming Group Manager of a major recruiting agency and gained international experience in this field.

Founded Froom & Partners in 1990 and brought the company into a partnership with Leaders Trust, serving his clients on an international platform. He leads senior search assignments in general management and other CXO positions in the banking and insurance industry and a wide range of “Head of…” positions in Finance, Sales and Marketing, and Operations. Within this industry, he also handles NXD positions internationally. Next to this, he has a strong Practice in the NGO/Not for Profit sector and in Industry.

Albert Froom is a founding member of AltoPartners. He has been the Chairman of AltoPartners from 2006 to 2009 and was a member of its Operating Committee and is currently the Global Head of Banking, Financial Services and Insurance practice.

Albert was named as one of the 150 most influential Headhunters in the world, by Business Week NY in 2008.