Board compositions of the future were discussed at the event organized in September 4th, 2023 by Boardman, Directors’ Institute Finland (DIF) and Hallituspartnerit – Board Professionals Helsinki.

The event featured brilliant speakers Risto Murto, CEO of Varma, Kristen Anderson, CEO of European Women on Boards, Susan Repo, Chief Financial Officer of ICEYE, Leena Saarinen, Board Chair of Hallituspartnerit – Board Professionals Helsinki, and Juhana Kallio, Managing Partner of Intera Partners.

In addition, Taru Lindeman, CEO of Boardman, and Leena Linnainmaa, Secretary General of DIF, delivered speeches, and Josefiina Kotilainen, CEO of Startup Foundation, acted as a moderator in a panel discussion.

The event was held live in Varma’s premises, and it was intended for owners, members of the nomination committees, shareholders’ nomination boards, chairs of the boards and other board members and professionals.

From left to right: Risto Murto (Varma), Taru Lindeman (Boardman), Josefiina Kotilainen (Startup Foundation), Susan Repo (ICEYE), Juhana Kallio (Intera Partners), Leena Linnainmaa (DIF), Kristen Anderson (European Women on Boards), Leena Saarinen (Hallituspartnerit – Board Professionals Helsinki).

EU’s new directive to improve gender balance on boards

Kristen Anderson, CEO of European Women on Boards, clarified the European Union’s perspective on what future corporate boards should look like. She mentioned that by June 30th, 2026, all stock-listed companies in the EU need to make changes in the composition of their boards. In practice, this means they need to increase the number of women (or underrepresented gender) in director positions.

The changes are being driven by a new directive from the European Union, which aims to improve the gender balance among the directors of listed companies. For those companies, that do not comply with the directive, there will be penalties such as fines or even cancellations of board member nominations.

Kristen Anderson, CEO of European Women on Boards, clarified the European Union’s perspective on what future corporate boards should look like.

Anderson stated that the companies must adopt the regulation to comply and inform the European Commission by December 28th, 2024. Companies can adopt the directive in two different ways:

• They can either ensure that at least 40% of their non-executive board members are women or
• They can ensure that at least 33% of all their directors (executive directors and non-executive board members) are women.

She told the audience that in 2022, 36% of non-executive board members of Finland‘s largest companies were women. She also said that all the research on gender diverse boards show that the companies that have diversity on boards perform better and make more ethical business decisions.

Leena Linnainmaa, Secretary General of DIF, added that the directive does not apply for listed companies less than 250 employees. However, she mentioned that it might be a risk for smaller listed company not to comply with the directive, if their stakeholders or common atmosphere in society demands it.

Focus of the boards should be on the real diversity, not just on gender

Risto Murto, CEO of Varma, said Finnish companies have made significant progress in gender equality, but there’s still final push needed. He mentioned that larger companies have taken great steps within the last ten years, but the real push needs to happen in smaller listed companies.

Murto emphasized that the real diversity of the boards does not only pertain to gender. Well-functioning boards that succeed in the future need people of different genders, but as well as individuals with different geographical backgrounds, different specific competences, and ages.

Risto Murto, CEO of Varma, was interviewed by Taru Lindeman, CEO of Boardman.

Murto noted that the challenge for Finnish boards is to get people with different geographical backgrounds. Many firms would like to get skilled board members from Asia and the US, but it is challenging due to non-competitive compensation. Currently, international board members in Finnish companies mainly come from the Scandinavia.

As diversity is needed, it also challenges Finnish companies to change

Juhana Kallio, Managing Partner of Intera Partners, said that the diversity is important on boards, but it also requires more effort from the chair. He pointed out a possible language problem with a real-life example: when the language of one Finnish board he served on was changed from Finnish to English, the quality of the conversation dropped. This was, of course, on the chair‘s responsibility, as the chair leads the conversation.

Susan Repo, Chief Financial Officer of ICEYE, encouraged companies to pay attention to diversity. She said that having young board members can be a good thing, as their ideas and energy can open up everybody’s perspectives in the boardroom. Repo also stated that US board members, like all board members, should be first and foremost passionate about the company and motivated to shape its future direction. Compensation is only one criteria and not the only factor – which means Finnish companies have a chance to have people from the US as their board members!

Josefiina Kotilainen (CEO of Startup Foundation), interviewed Susan Repo, (CFO of ICEYE), Juhana Kallio, (Managing Partner of Intera Partners), and Leena Saarinen (Board Chair of Hallituspartnerit – Board Professionals Helsinki).

Leena Saarinen, Board Chair of Hallituspartnerit – Board Professionals Helsinki, expressed that she hope more discussion on following the topic: “How to lead diversified teams as a chair?” She said that not everyone understand the importance of diversity on boards, which is why we need more stories and events on diversity. Finnish companies also need more help and education on how to change their language and reporting to English so that international board members can join companies.

Text: Karoliina Kuhalampi

Pictures: Julia Ruotsi

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