In Denmark, it is mandatory to establish a board of directors for all limited companies as well as limited liability companies, which for more than three years have had more than 35 employees. Out of Denmark’s approximately 80.000 limited liability companies only 1.000 need to comply, however the actual number having a board is around 12.000 – this indicates that many founders and owners of midsized and smaller companies have acknowledged the value of voluntarily establishing a professional board.
JO Informatik is an example from my own board portfolio – a small Danish software company that designs and develops digital archives and software for digital administration. Three years ago, the founder and CEO Jesper Olsen decided to establish a professional board of directors and since then the value creation has accelerated significantly. Revenue has grown 66% over the last two years, a negative result has turned positive and the company consistently executes on the strategy, which recently has paved the way for an entry into the Norwegian market.
I would like to share some selected highlights from an article on JO Informatik’s experiences:
Professional sparring
”As a founding manager, you are often on your own and cannot cope with your big plans. With a professional board you get access to sparring on strategy, targets and how to bring it all to life”, says lawyer Henrik Hornsleth from Advodan, who is the Chairman of the board at JO Informatik.
Did not imagine it would turn out so well
”What counts is the experience of the board members. They provide tools and procedures, which we as a small company did not even know of. They can analyse the company back and forth, ask the critical questions, and assess our profit drivers by applying relevant budget and strategy tools. Their way of viewing my business is completely different from mine, and they are good at pointing out where we are performing well, earning our money and where to put our focus for the future. They have delivered a highly professional piece of work”, says founding manager Jesper Olsen.
An active soundboard
According to board member Gorm Erich Jensen, the founding manager Jesper Olsen had many ideas when the board was established. However, he missed somebody to discuss and challenge his ideas:
”The board could ask different questions than he was used to. We were able to push him on, for example to hire some more employees or see new markets and business opportunities. We have forced the management to continuously follow up on whether the company achieved its objectives or not, and we held them accountable for this. It has given the management more drive and made them more aware of what they have delivered, and what to deliver in the next period, which has led to much better results," says board member Erich Gorm Jensen, who is a partner in the IT company Wisepeople.it in Horsholm.
Puts pressure on management
In addition to Jesper Olsen, the management team counts Jeanett Egesø, who is responsible for sales and marketing.
”The board forces us to think more strategically and long term on our market, products and employees. Earlier we were mostly focused on daily operational tasks. Now our operating perspective is six to twelve months ahead,” says Jeanett Egesø.
Professional board work kick-starts a positive development
”When recruiting your board members you need to be as thorough as when you hire employees. You need to define the competences you are currently lacking and then go finding the right profiles,” says board memberMads Middelboe, who has 30 years of business experience from telecom, fast moving consumer goods and as a strategy and leadership advisor with his own company Leadmore.
”On the board, we facilitate active and value-adding leadership. The advantage for JO Informatik is that the company can afford to draw upon a very experienced and broad range of competences, which it could never afford by hiring the corresponding employee profiles,” says Mads Middelboe.
You can read the full article on JO Informatik here.
For founding manager Jesper Olsen, his professional board was a valuable eye-opener. Being used to decide it all by oneself, it may seem a bit frightening to relinquish the reins. However, Jesper Olsen has discovered many apparent advantages. You can pick up more inspiration in a Berlingske Business interview with him h ere.
Good luck, if you are about to embark on the board journey your-self.
Mads Middelboe
Executive Advisor & CEO
Leadmore ®