Styrelsernas ersättningar stiger

Posted in Aktuellt, Board work / Styrelsearbete on March 1st, 2021 by admin

Arvodena för styrelseledamöterna i flera av Stockholmsbörsens största bolag ska höjas på årets stämmor, visar Di:s kartläggning. Swedbanks ordförande Göran Persson och hans kolleger i styrelsen kan glädjas åt en rejäl löneökning på 8 procent.

Efter det pandemityngda 2020 hoppas näringslivet på en ordentlig omstart under innevarande år. Ifjol ställde många bolag in utdelningen till aktieägarna till följd av osäkerheten i spåren av covid-19-utbrottet. Även föreslagna höjningar av arvodet för ordföranden och övriga styrelseledamöter uteblev.

Tio av de elva valberedningar i OMXS30-bolagen som hittills kallat till årsstämma har föreslagit höjda styrelsearvoden. Av de som föreslår påökning ligger höjningen i snitt på 4,6 procent för styrelseordförande, respektive 4,4 för övriga styrelseledamöter.

När valberedningarna på löpande band drog tillbaka sina förslag på höjda arvoden, stod besluten i direkt relation till osäkerheten kopplat till pandemin. I ett mer normaliserat marknadsläge finns det inte längre något hinder för bolagen att höja ersättningarna till styrelserna, enligt Aktiespararnas vd Joacim Olsson.

”När ett företag befinner sig i en kris där intäkter och lönsamhet påverkas måste man så klart förhålla sig till alla kostnader, men nu ser vi snarare väldigt välmående bolag i stor utsträckning trots pandemin”, säger han.

Han ser däremot inget självändamål i att höja arvodena, utöver att kunna erbjuda konkurrenskraftiga ersättningsnivåer för att locka till sig den bästa kompetensen.

”Styrelsearvoden ska återspegla det ansvar och den arbetsinsats som krävs i ett bolags styrelse och till viss mån även sättas så att det är lätt att rekrytera rätt kompetens till styrelsen. Jag har svårt att se att pandemin skulle ha gjort styrelseuppdraget mindre ansvarsfullt eller mindre arbetskrävande”, säger han.

I samband med virusutbrottet fördröjdes även den svenska avtalsrörelsen och den återupptogs först under hösten. Arbetsgivarna och facken inom industrin enades om ett löneavtal på 5,4 procent i ett 29 månader långt avtal som löper ut den 31 mars 2023. Nivån brukar ses som normen för svensk löneökning.

Högst påökning förslår valberedningen i Swedbank SWED A -1,87% där ordförande Göran Persson får ett lönepåslag om 8 procent till drygt 2,8 miljoner kronor per år efter årsstämman i slutet av mars – långt över den generella löneutvecklingen i Sverige och övriga ordföranden bland OMXS30-bolagen (se faktaruta).

Pensionsjätten Alecta äger aktieposter i de tre svenska storbankerna samt Nordea NDA SE -1,65% och har en representant i respektive valberedning. Carina Silberg, chef för ägarstyrning på Alecta, påpekar att styrelsearvodet i Swedbank länge varit lägre än hos konkurrenterna.

”Vi har under flera år sett att Swedbank ligger lägre än de övriga bankerna och vi tror helt enkelt inte att det gynnar möjligheten att rekrytera ledamöter till styrelsen. Det handlar om att ta igen den skillnaden”, säger hon.

Samtliga valberedningar med en Alecta-representant bland OMXS30-bolagen, som Di kartlagt, föreslår att höja arvodet för ordförande och övriga styrelseledamöter.

”Vi ser arvodet som en lön och ledamöternas arbete har inte minskat. Förra året stod även många styrelsearvoden still, och det med rätta – läget var osäkert och många saker ställdes in, även utdelningarna”, säger Carina Silberg.

Finns det en risk att bolagens anställda känner sig förfördelade när arvodet för ordförande och styrelseledamöter höjs kraftigt?
”Det kan jag inte utesluta. Men jag tror att många valberedningar har beaktat hur lönerörelsen har rört sig i resonemanget kring arvoden. Vi hoppas att man ser att vi agerar för att kunna ha kompetenta styrelser på plats för god värdeökning framåt.”

I investmentbolaget Industrivärden, där Fredrik Lundberg är ordföranden, har samtliga av de fem portföljbolag som hittills skickat kallelse till årsstämman gett förslag på ökade styrelsearvoden. Störst påslag – 5,8 procent – förslås till hygienkoncernen Essitys ESSITY B -1,78% ordförande Pär Boman med styrelse.

”Det är rimligt att personer som lägger ned mycket kraft och engagemang på sitt styrelseuppdrag också får en rimlig ersättning. Att man höjer arvodena över tid med som nu ganska måttliga belopp är helt naturligt. Vi är beroende av att ha duktiga människor i våra styrelser”, säger Fredrik Lundberg.

Är styrelsearvoden för låga i svenska bolag i dag?
”I vissa bolag där arbetsinsatsen har ökat kraftigt kan det vara så att man behöver se över arvodena. Komplexiteten i styrelsearbetet har ökat på väldigt många håll, men det måste avgöras från fall till fall i varje enskilt bolag.”

Källa: DI.se, 1 mars 2021
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The board’s role during crisis and beyond

Posted in Aktuellt, Board work / Styrelsearbete on February 24th, 2021 by admin

In this episode of the Inside the Strategy Room podcast, McKinsey senior partner Celia Huber, who leads board services work in North America, talks with three seasoned board directors about the role boards are playing in guiding their companies toward recovery from the COVID-19 crisis. Nora Aufreiter sits on the boards of Scotiabank, supermarket operator Kroger, and real-estate developer Cadillac Fairview, as well as a Toronto hospital. Peter Bisson is an independent director on the boards of HR services company ADP and research firm Gartner. And Margaret (Peggy) Mulligan serves on the boards of Canadian Western Bank and mining company New Gold. The panel discussion was hosted by Canada’s Institute of Corporate Directors. This is an edited transcript of the discussion. For more conversations on the strategy issues that matter, subscribe to the series on Apple Podcasts or Google Play.

Celia Huber: I thought we would start by talking about how the board’s role has evolved over time. After the financial crisis, we saw a trend toward more independent boards that brought their own perspectives as regulation and scrutiny increased. Today, boards are going beyond their core responsibility for oversight of corporate financials and staying on top of things like technological shifts and the company’s impact on broader society. Even before the pandemic, we saw boards increasingly dealing with how to preserve corporate resilience, deal with activist investors, monitor corporate culture, and make the right decisions on risks around cybersecurity and other issues. So, the pressure on boards to be fully engaged and act as catalysts for change is coming from many directions now.We see a few hallmarks of boards that are successful at serving as such catalysts. The first is a deep understanding of the industry and its context, including the key uncertainties. Boards can cultivate this knowledge by bringing in outside speakers, seeking input from external stakeholders, and exploring various scenarios. The second is thinking about strategy as part of every board meeting rather than as something that happens once a year or every three years. Lastly, the most effective boards devote considerable attention to how they operate in terms of sharing feedback, strengthening team dynamics, and interacting with management.

Today, we are excited to hear our panelists’ perspectives on serving as board members during this unique time. Peggy, what distinguishes a good board from a great board, especially now in the midst of this economic crisis?Margaret Mulligan: I think the same factors distinguish a good board from a great board in normal and crisis times, but it takes a crisis to know if you actually have a great board. There’s nothing like a true test to understand where you are. A great board, first and foremost, understands the difference between the management’s role and the board’s role, and respects that difference because board members fulfilled their key accountability, which is ensuring they have the right CEO and supporting cast of executives on whom they can rely in times of crisis. You also need the board, the management team, and the full organization to understand, respect, embrace, and live both the company’s culture and strategy. I think a robust focus on enterprise risk is terribly important and not just as an annual check-the-box exercise but a real, living, vibrant function. And culture, strategy, and enterprise risk need to be embedded in everything that a company talks about and the board decides upon, because they are not disparate activities.

Celia Huber: Peter, as we were preparing for this session, you made the point that it is not as if the crisis has flipped a switch on corporate strategy; strategy endures. Can you elaborate?

Peter Bisson: Certainly. There are maybe 10 to 15 percent of companies for which this crisis is an existential threat. My comments do not apply to those. But for others, you are doing strategy in every board meeting. Typically, you would lay out a multiyear view of what you want to have in the market, the assets you would like to own, companies you would like to acquire. The pandemic does not really affect that. A company also typically has two or three transformation themes. For example, you are looking to change the customer experience and develop some talent. The pandemic does not change most of those priorities. It might cause the acceleration of one or two; the shift online might cause you to move faster on the customer experience.

The test for the board is, can you keep your eye on the key strategic decisions or transformation programs you are pursuing, recognizing that the management team might be reaching the saturation point in what it can manage? The board needs to help the management team get done the additional work that comes with a crisis. Additionally, there may be a trade-off between maintaining long-term investments and delivering short-term performance. Each board has to make judgments on those trade-offs, and they are often not easy.

The test for the board is, can you keep your eye on the key strategic decisions or transformations you are pursuing, recognizing that management may be reaching the saturation point in what it can manage?
Peter Bisson

Celia Huber: Those trade-offs are the subject of my next question. Nora, you sit on boards of consumer-facing organizations, including a grocer and a hospital. Can you talk about how the crisis has affected those sectors?

Nora Aufreiter: Sure. I’m on the boards of three organizations that are in essential services, so the crisis had a dramatic impact on them. For example, grocery is an industry with typically 1 to 3 percent growth and during the pandemic, my company’s sales were up 30 percent. In that situation, you face enormous pressure in terms of staffing, supply chain, and keeping food on the shelf, so having an engaged, experienced, and industry-knowledgeable board is critical. This is not a time for learning.

Secondly, the pandemic showed the importance of having a business-continuity plan or an incident response team so that when a crisis hits, you have the organizational structure, processes, and people in place. Keeping these plans well-practiced is incredibly important. Who is the emergency replacement for the CEO? What does the incident response team leadership look like? Have we dusted off those processes even though we may not have had a crisis in ten years? That has been one of my big takeaways.

Celia Huber: Have new topics emerged on the board agenda during this crisis? Peggy, can you speak to that?

Margaret Mulligan: We have not seen new topics, but certainly there has been some refocusing on how to implement the strategy that had been put in place. It was, I must say, very interesting trying to figure out how a mining company, one of whose major assets is on the US–Canada border and right beside a First Nations reserve would manage through COVID-19. Providing access to testing and healthcare was a new way of focusing on the ESG [environmental, social, and governance] issues that were always top of mind for that board.

While the agenda topics have not changed much, the frequency of meetings has, simply because management has to make many tactical decisions and conduct business differently. I do expect there could be some refocusing of agenda items once we all take a breath because we will revisit strategies and enterprise risks. The black swan scenario that we all model—we are living it. I hope there will be a lot of solemn learning from that.

The black swan scenario that we all model—we are living it. I hope there will be a lot of solemn learning from that.
Margaret Mulligan

Celia Huber: Has decision making become faster? Nora, have you seen this?

Nora Aufreiter: I think both management and boards have been surprised at how quickly they can take decisions when necessary. Once you have experienced that, it gives you the confidence to act more quickly. That does not cast aside the need for proper fact gathering and deliberation in a board meeting. On my boards, the frequency of meetings is not as high now as it was during the early days of the crisis. We were meeting weekly and then biweekly and then monthly. But for those boards meeting usually quarterly, we have kept a check-in every four to six weeks. Management finds that helpful, the boards find it helpful, and I think that higher level of engagement allows decision making to happen faster because people are more current.

Both management and boards have been surprised by how quickly they can make decisions when necessary. Once you have experienced that, it gives you the confidence to act more quickly.
Nora Aufreiter

Peter Bisson: I would make the point a little differently: the speed of decisions was increased by good management of the exceptions that had to be addressed. For example, when you suddenly move 60,000 people from working in an office to working from home, you need to keep track of what is happening to everybody and cybersecurity becomes an important topic. A lot of the efficiency in decision making has been driven by a strong board–management interface.

Celia Huber: Have you found the crisis affecting the demarcation between the board and management in terms of the decisions that boards get involved in?

Peter Bisson: The chair or lead director has an important role to play, in a sense, to police the boundary. Executional decisions are usually left to management, but if they carry a reputational dimension, then the management team tends to bring it to the board. You do not want the board trying to run the company operationally, but I go back to the idea of exception management.

Nora Aufreiter: With the higher speed of decisions, risk management is a big deal. Those frequent check-ins between management and the board are important so if something happens, you have not left the board out of the loop. But I don’t think the roles have changed. The board is the supervisory and advisory body, but such decisions are management’s call. What becomes challenging is the virtual nature of the interactions. Many of the sidebar-style interactions between individual executives and board members at the coffee bar, those natural touchpoints do not happen, so I have seen more outreach from management to individual board members or board member to board member.

Margaret Mulligan: I also have seen more outreach from the management because this is uncharted territory and it makes sense to seek the counsel of somebody who may have lived through an earlier crisis. I was running operations at Scotiabank during 9/11. Some of the experiences from that become relevant as people try to figure their way through this crisis. It is actually very heartening to see management using the board as a sober second thought and sounding board.

Celia Huber: Peggy, one of your boards brought in two new directors during this time, I presume virtually. Any practical tips on how to do that?

Margaret Mulligan: It was more complicated. In each case, any board member who was geographically close managed to have an outdoor coffee with the person because, as we all know, fit is tremendously important. But we found that the things you hope to achieve through a board refresh worked brilliantly. You get a new set of eyes, somebody asking fresh questions. You could see all our faces on the Zoom call going, “Gee, I should have thought of that.” Anybody who is thinking of holding back on a board refresh right now: don’t! It has proven to be just fantastic.

Celia Huber: One of the most important roles a board plays is deciding management compensation. Given that some companies are doing better and some are doing much worse than a year ago, do you hold to the original performance incentive plan?

Peter Bisson: In my experience, the management team objectives, and hence the compensation tied to them, have not shifted. The management team themselves do not recommend changes to the compensation system, fully knowing that it will be a bad year from a compensation point of view. It is a bit different when you look down the line. For example, if you have a direct sales force, they cannot sell nearly as much virtually, and that does not work for people trying to hit sales quotas. So there have been changes in compensation that lean in the direction of keeping key people whole.

Margaret Mulligan: Anybody whose equity compensation is coming due this year will get hurt because markets are still down. But if you look at equity comps, are you still on the same curve as your shareholders? Yes, arguably. On the flip side, equity grants happening this year will be, in theory, at a greatly reduced rate, with almost a guaranteed uptick. I have seen reports from compensation consultants arguing for modifications on both sides.

My boards have not reached any decisions, but it is certainly something we are discussing. The litmus test will be, have you properly remunerated the right people for the jobs they have done in this situation? And can you explain that in a way your shareholders accept? The wording in the proxy circulars is going to be very important. There are no easy answers and a whole lot of questions right now.

Celia Huber: Let’s turn to strategy. Peter, you started off saying that many strategies have stayed roughly the same. How are boards balancing short-term needs with original investment plans?

Peter Bisson: In terms of the trend acceleration or deceleration dimension, the elements of strategy that were tied to digitization or consumer experience have accelerated. The transactional dimension of strategy has slowed down a bit to the extent that acquisitions were part of the strategy because you cannot do due diligence easily, and agreeing on the fair value is trickier because stock prices have moved a lot. The area of biggest discussion is trading off the short term and the long term. In this environment, it would be easy to back off certain strategic investments to close earnings gaps, and I see thoughtful conversations about what can be deferred and just taking the short-term pain with the stock market.

Celia Huber: Have you encountered any pleasant surprises during these difficult past few months?

Margaret Mulligan: Nothing unites like a common enemy. We talked about resilience in the supply chain but, boy, the resilience of our management teams and entire organizations has been really wonderful to see. I find people being very innovative and happy to express those thoughts. And they are being well listened to. With my boards, it has created a real team attitude and some strong advances on issues we have been working on.

Peter Bisson: I would echo Peggy’s view. The other thing I am very pleased to see is having tens of thousands of people go from working in an office to working from home and still maintaining an extremely positive customer experience. I regard that as nothing short of a miracle. It implies a huge amount of heroic effort by many people down the line. Often, the hesitation about making changes in processes hinges on concerns that employees will not be able to do it. People have proven the contrary during this forced change.

Celia Huber: How are your boards engaging on ESG issues, corporate purpose, and diversity and inclusion?

Margaret Mulligan: I think the corporate world is really advancing on the ESG front. And let’s be honest, we are getting a solid nudge from many extraordinarily influential shareholders. There is not just an acceptance of ESG in the companies I deal with but an embrace, and not just so we can publicize it. When you think about a gold miner, the risk of environmental impact is pretty catastrophic if you are not mindful and it is part of investors’ risk assessment.

Nora Aufreiter: In Canada, boards of directors are responsible for the health, wellness, and long-term sustainability of their companies rather than just being accountable to shareholders. But I would say, if you are focused only on the shareholders and not the staff and customers, those shareholders will end up unhappy so, to a certain extent, it is common sense. If you have a clear purpose, that will naturally enhance your commitments around ESG, and those companies that do not have one increasingly have to develop one because that is part of the corporate fabric now. If you have a purpose that is meaningful at the company level, it reinforces the culture and allows everyone to celebrate the great things they can do, which is highly motivating during a crisis.

Celia Huber: We talked about boards being catalysts for change and we talked about COVID-19 being a catalyst for change. Can you highlight one or two transformational opportunities you see in your companies?

Peter Bisson: In the organizations I am involved in, there are large digital transformations underway. By and large, the technologies are in place and the barrier has been behavioral change. Being forced to do so much behavioral change recently has been a silver lining here. The art of the possible now will be seen as far more robust than was the case six months ago.

Nora Aufreiter: To me, the big opportunity from the crisis is unlocking the inertia around behavior. Management teams are working together and many trends have been accelerated. The opportunity is not to lose the momentum for change.

Margaret Mulligan: To me, the crisis has shaken the idea that the annual strategy process can encompass everything that might happen. That’s a good wake-up call.

 

Source: McKinsey.com, 23 February 2021
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Ledare i Dagens Industri om kvinnor, styrelserepresentation och lönsamhet

Posted in Aktuellt, Board work / Styrelsearbete on January 30th, 2021 by admin

Svagt stöd för att kvinnor ökar vinst

Det går inte att visa att kvinnor gör företag mer lönsamma, men frågan är fel ställd. Inget talar för att könet är avgörande.

Kraven baseras i stor utsträckning på rapporter som stora konsultfirmor som EY och PwC producerar på temat att mångfald ökar lönsamheten. Ofta är det just rapporter, även om det ibland kallas forskning. Man bör skilja på dessa två genrer. Rapporterna har ofta en beställare och alltid en agenda, de visar alltid att det är mer lönsamt med mångfald. Det är främst de positiva effekterna av kvinnlig representation som rapporteras, eftersom den frågan har funnits längre på agendan.

Forskningen vid ledande universitet om kvinnors karriärer är inriktad på att försöka förklara de skillnader som fortfarande finns när det gäller könsfördelning på topposter i näringslivet. De studerar biologi, beteende och kulturella orsaker. Men även här driver man ibland tesen om att mångfald ger bättre resultat.

Harvard Business Review skriver (4/11 2016) under rubriken ”Why diverse teams are smarter”. Det handlar bland annat om att upptäcka sina egna förutfattade meningar, att heterogena grupper är mer noggranna med fakta därför att de riskerar bli ifrågasatta, och är mer innovativa. Allt detta är intressanta iakttagelser, som säkert är giltiga. Men de är svåra att belägga så som relaterade just till kön och etnicitet snarare än erfarenheter och profil. Dessutom påverkas resultatet av geografi/kultur. Samma tidning citerar i ”When gender diversity make firms more productive” (11/2 2019) en studie som visar att produktiviteten i ett företag kan öka med fler kvinnor om arbetsmiljön redan är jämställd. Annars uteblir effekten.

Peterson Institute for International Economics har tillsammans med EY gjort en stor studie som citerats vida för sin tes, för det är mer en tes än en slutsats, att bolag med 30 procent kvinnor i styrelsen har en vinstmarginal som är upp till 6 procent högre än de utan kvinnor. Samtidigt står det i rapporten att ”effekten av kvinnors närvaro i styrelsen är inte statistiskt robust”. Vidare finns ”ingen statistiskt observerbar evidens för att en organisations lönsamhet påverkas av att ha en kvinnlig vd”.

Vad detta lär oss är att det är fel att tro att man kan härleda resultat direkt till etnicitet och kön, lika lite när det gäller en svart kvinna som en vit man. Det är inget argument emot mångfald, men det visar att man bör applicera begreppet mycket bredare. Det handlar om att bryta normer, och ta in nya perspektiv. Exempelvis rekrytera ur andra åldersgrupper än man brukar, eller utanför sin sektor.

Den tydligaste korrelationen är mellan kvinnor i styrelsen och företagens storlek räknat som marknadsvärde. Stora företag är mer vinstrika och har fler kvinnor i styrelsen. Men det finns ingen kausalitet mellan kvinnor och marknadsvärde. Troligast är att stora internationella företag har en bredare, mer professionell rekrytering och samtidigt har ett hårt tryck på sig från institutionella investerare. På Fortune 500 är 22,5 procent av styrelseledamöterna kvinnor, motsvarande andel på Fortune 1000 är 16,6 procent.

Samtidigt ligger nyrekryteringen på Fortune 500 på runt 44 procent och är alltså nästan jämlik. Det finns en tröghet i styrelser eftersom omsättningen inte är så hög, en förändring tar därför tid. Andelen kvinnliga styrelseledamöter i bolag noterade på Nasdaq Stockholm låg 2020 på 33,7 procent. Utvecklingen går åt rätt håll, men måste också göra det av rätt skäl.

Styrelsen är en ägarfråga, och det är deras ansvar att rekrytera enligt de profiler de söker för bolagets bästa. Successivt kommer rekryteringspoolen att breddas eftersom kvinnor nu dominerar på många högre utbildningar. Samtidigt är det kanske dags att ta nästa steg och se kvinnor som en naturlig del i rekryteringsbasen snarare än en udda resurs.

Källa: DI.se, 29 januari 2021
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Börsnoterade bolag ligger efter med nya ersättningsrapporter

Posted in Aktuellt, Board work / Styrelsearbete on December 13th, 2020 by admin
Flera börsnoterade bolag har ännu inte påbörjat arbetet med den ersättningsrapport som för första gången måste upprättas och publiceras inför årsstämman 2021, detta enligt aktieägarrättsdirektivet. Det fastställer Novare Pay i en undersökning. Erika Andersson, vd och delägare i Novare Pay, ser bekymrat på situationen.

Den samlade bilden talar sitt tydliga språk; merparten har varken börjat arbeta med ersättningsrapporten eller slutfört den, säger hon. Aktieägarrättsdirektivet trädde i kraft 2019 med syftet att stärka aktieägarnas ställning och försäkra att beslut fattas för bolags långsiktiga stabilitet. Men utmaningarna är många, säger Andersson. Företagen är bland annat osäkra på hur de nya reglerna ska tolkas i praktiken och därefter tillämpas på ett marknadsmässigt sätt, detta trots att Kollegiet för svensk bolagsstyrning nu kommit med förtydligande hur direktiven ska tolkas.

– Arbetet är tidskrävande, men utmaningarna ligger mer i sammanställningen av ersättningsdata än i juridiska formalia. Svenskt Näringsliv tog tidigt initiativet att färdigställa en typ av mall som skickats ut till majoriteten av de bolag som omfattas av lagen. För de bolag som fått all lönedata i ordning kvarstår att förbereda styrelsen och andra intressenter för de kommunikativa utmaningar som rapporten kan innebära., säger Erika Andersson till Realtid.

Vad är det som krävs nu för företagen ska lyckas med ersättningsredovisning?

– Det mest tidskrävande arbetet är att förstå vilka lönekomponenter och nyckeltal som ska redovisas i de olika tabellerna. Rörliga löner, aktieprogram och tjänstepensioner är särskilt komplicerade att beräkna. Bolagen behöver därför påbörja arbetet i god tid.

Vad är det som krävs av lagstiftarna?

– En hel del. Det är lite mer komplicerat än att klippa och klistra från årsredovisningen. I år har nya regler kommit gällande Riktlinjer till ledande befattningshavare som läggs fram till bolagstämman. Uppdateringarna där handlar om att dessa ska kopplas till bolagets långsiktiga strategi och hållbarhet samt att man ska ange hur stor respektive ersättningskomponent är i förhållande till övriga ersättningskomponenter. Ersättningsrapporten, som ska läggas fram till årsstämman 2021, ska innehålla information om ersättningen för 2020 (likt som i årsredovisningen) men även inkludera mer information om rörliga löner och utfall i aktierelaterade program. Rapporten ska dessutom innehålla en jämförelse av utvecklingen av ersättningen till vd, vvd och bolagets resultat samt utvecklingen av ersättningen till övriga anställda bolaget, där jämförelsen görs över en femårsperiod. Här dyker många frågetecken upp hos våra kunder, såsom om tidigare anställda ska inkluderas och liknande. Under fem år kan det hända mycket inom ett bolag och det blir därför viktigt för bolagen att de är konsekventa i sina redogörelser.

Hur sannolikt är det att man förtydligar regelverket ännu mer alternativt att man gör om det?

– Inte sannolikt i nuläget. Kollegiet för Svensk Bolagsstyrning har nu i december publicerat uppdaterade regler för ersättningar. Även EU-kommissionen ska publicera nya guidelines, men vår bild är att dessa inte kommer att följas fullt ut av svenska bolag eftersom de inte följer svensk praxis gällande redovisning av ersättningar.

Hur stor andel av bolagen beräknas klara/inte klara av att genomföra regelverket i praktiken? Med vilka konsekvenser?

– Vår bild är att implementeringen kommer spreta. En del bolag kommer att vara mer ambitiösa än andra. Det kommer sannolikt ta några år för en marknadspraxis att utvecklats. Reglerna är dock gällande och måste följas av alla börsbolag och statligt ägda bolag, så arbetet måste göras oavsett. Konsekvensen att inte följa reglerna för noterade bolag är dels att man bryter mot vad som står i Aktiebolagslagen (ABL) samt att man bryter mot Koden vilket både kan innebära vite och att man skadar sitt anseende som börsbolag, säger Erika Andersson.

Källa: Realtid.se, 10 december 2020
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Eight lessons on how to get the growth you planned

Posted in Aktuellt, Allmänt, Board work / Styrelsearbete, Executive Team / Ledningsgruppsarbete on December 4th, 2020 by admin

Now is not the time to slow down. Growth initiatives are critical for value creation, even survival, throughout an economic cycle.

Maintaining focus on the growth agenda, especially during a downturn, is no easy feat, however. For growth initiatives to deliver lasting gains, they require a clear aspiration, organization-wide alignment, and careful monitoring. When we reviewed 60 recent growth transformations—intense, company-wide programs aimed at enhancing overall corporate performance—we found that more than half failed to meet their targets. So we looked for the biggest pitfalls that tripped up promising projects and the key elements that contributed to others’ success. Our analysis reveals eight lessons that companies looking to reignite growth should apply.

  1. Set targets high enough to compensate for declining momentum in the base business and inevitable setbacksAs we noted in our earlier research, the growth aspiration that leaders set matters a great deal to the shareholder value those efforts generate. Companies whose growth outperformed others throughout the 2007–2017 cycle achieved excess total returns to shareholders (TRS) of 8 percent, while the rest hovered around zero during the period. Yet many companies venture on what they believe to be ambitious programs only to find the results fail to change the growth trajectory of their overall business. Why? The reason often lies in overly optimistic baseline scenarios and a lack of detailed understanding of the business momentum. Over time, competitive activity, shifts in sales channels, product commoditization, and other market factors can erode revenue in the base business. Without a granular view of that underlying business, bold plans, even if executed well, can be undermined by leakage in the base. To produce incremental growth, the targets and priorities leaders set for the growth program need to accurately reflect the business’s momentum and compensate for this natural attrition.Consider the experience of a technology player looking to turn around declining revenues. About a year into its growth transformation, the program had produced an impressive 8 percent in new revenues—yet the company’s total sales continued to decline. The leaders realized that the downward sales trend in other parts of its business exceeded the gains made through the new growth initiatives. The company ended up resetting its targets to take into account the trajectory of its base business based on more accurate market forecasts.

    Companies also need to be realistic about their likelihood of success. All growth initiatives face the intrinsic risk of new competitors or changes in customer behavior shifting the market dynamics, and some efforts are bound to underdeliver or fail altogether. In the growth transformations we reviewed, the success rate ranged between 50 to 70 percent. To offset the likely setbacks, companies should create a pipeline of initiatives that adds up to 130 to 150 percent of the growth ambition. Leaders should also foster an entrepreneurial spirit and not punish failure due to factors beyond project managers’ control.

  2. Define a few growth themes and ensure the entire organization embraces themBefore launching growth transformations, many companies extensively review and update their strategic priorities. This typically entails analyses of market trends, category and product performance, and competitive activities. In studying the practices of growth outperformers, we found these companies go beyond the core and look into potential moves involving geography, market adjacency, and value chain to set their priorities and aspirations.The result should be a set of four to six clearly defined priority growth themes that cover all potential growth levers. That could mean expanding offerings by entering into new product categories or introducing new services, and expanding segments the company pursues by deepening penetration into existing markets or focusing on micromarkets. Defending the existing customer base (through the acquisition of new accounts, churn reduction, and cross-sell) also needs to be part of the mix, as does innovation in products and business models. Improving sales performance management or customer experience and even M&A or partnerships all could be part of the growth recipe. It’s essential that the organization can act on the growth themes within 12 to 18 months and that their achievement be hardwired into incentives for business leaders.

    In our experience, cascading these priority themes down through the organization is as important as the strategic review that produces them. The failure to communicate and ensure organization-wide alignment on the desired direction hobbled the growth program at one industrial company. The leaders had spent significant time developing what they believed to be clear strategic priorities, yet growth failed to materialize. There were two problems, it turned out: the priorities were too numerous for the organization to address with focus and scale, and regional business leaders found them disconnected from near-term opportunities for their units. A subsequent mapping of the hundreds of regional initiatives against the corporate priorities demonstrated that some units pursued growth projects tailored to their specific markets rather than the company’s chosen themes, and those local opportunities were in turn not supported by the corporate programs, diminishing the potential to leverage the company’s global scale.

  3. Protect the margin of your base business while focusing growth on high-margin targetsA growth aspiration sometimes ends up becoming a push for volume at the expense of margin. Sales teams may present “opportunities” that essentially mean lowering prices or focusing on lower-margin offerings to reach more customers—recipes that rarely deliver profitable growth. This risk is particularly acute in companies that lack strict pricing and margin controls. Perhaps counterintuitively, raising margin targets when setting the aspiration for the growth transformation can help deliver the desired results. This requires leaders to identify initiatives that combine volume growth and pricing levers within sales. More broadly, they should pursue ideas that are both growth- and margin-accretive, such as business-model innovations or expansion into high-margin, high-growth markets.When an international agricultural company asked its various units to develop growth plans, for example, it found the country organizations were reluctant to launch pricing-related initiatives alongside revenue-growth efforts for fear this would limit their sales opportunities. Management also realized the organization lacked the pricing systems, processes, and governance needed to avoid margin erosion as business units strove to deliver top-line growth. To address these shortcomings, the company developed a pricing tool through which it could challenge each national organization on its (net) prices at the product level and intervene when it found them offtrack. The new tool not only delivered a 1 percent improvement in earnings before interest and tax, but ensured the revenue growth achieved by the business units did not erode margins.
  4. Make line managers accountable for designing and implementing growth programsOur analysis of successful growth transformations suggests that having a critical mass of employees involved in their design and execution makes a big difference. Companies that score in the top quartile of growth performance mobilized at least 8 percent of their workforce to drive the initiatives. Some top performers deployed 20 percent of staff or more.Additionally, for growth gains to be sustainable, local leaders need to be accountable for their targets—they should “own” their parts of the program. As such, management should empower them to develop portfolios of initiatives (within the corporate growth themes) that are customized for their businesses or regional contexts and are projected to deliver 130 to 150 percent of their ultimate growth target (in line with our point in the first lesson). Line managers—the individuals who know the offerings and the customers best—should then lead the initiatives, not external project managers who lack a long-term stake in the business. Which function these internal leaders come from would depend on whether the initiatives are related to go-to-market strategy, innovation, product development, or inorganic moves.

    Some growth opportunities require establishing or improving cross-functional collaboration. As the chief growth officer of one leading consumer packaged-goods company put it, “Product, engineering, and sales [should] take decisions jointly, so you don’t have fingers pointing at each other.” For example, a food ingredient player noticed the lack of short-term alignment between operations and sales which, as at many organizations, were separate functions. A shortage of customer orders at specific moments led to sizable productivity losses due to production stops and slowdowns. Unlocking growth required making sales and operations jointly accountable for the objectives, key performance indicators (KPIs), and milestones set for different team members.

  5. Fund growth by reallocating resources and reinvesting gainsAsking business unit leaders to come up with growth ideas will inevitably lead to requests for additional resources for sales, marketing, and technology. An ambitious growth transformation does require proper funding, but it should be guided by a structured process of resource reallocation. Often, existing allocations are due more to past performance than future growth potential. Consider instead asking each unit leader to free up 20 to 30 percent of resources from their existing budgets and separate the savings and the gains from earlier initiatives when reallocating these resources to growth programs. Making resource reallocation a mandatory exercise before committing any additional funding forces everyone to invest in their own success.Wherever the resources come from, top leadership needs to communicate early how much funding will be provided to support growth initiatives and how the decisions about its allocation will be made. Setting expectations for new funds and then failing to deliver them can be a major blow to the transformation effort’s credibility and the organization’s commitment to its execution.
  6. Create implementation plans with clear milestonesMcKinsey’s research on organizational transformations suggests that shorter initiatives tend to produce better results. In that study, we found that successful transformations delivered close to a third of the transformation value within the first three months and approximately 75 percent in the first year. Our research into growth transformations found a similar trend: shorter initiatives have higher success rates. Moreover, early successes are important accelerators of the entire transformation.Yet many growth programs are designed to last multiple years. What’s more, they often rely on high-level plans short on detailed proximate goals and expectations. Designing a growth program with specific, measurable, achievable, realistic, and timebound milestones can enable leaders to address execution bottlenecks in a timely manner. This requires setting milestones based on weeks rather than months or years.

    It can be useful to test the larger program with a limited-time pilot. One electronics player that was working on a new direct-to-consumer proposition it expected to become a sizable business first spent six months running a small-scale study with select users to develop and test the proposition. The lessons at each step of the project helped the company fine-tune the expectations for subsequent milestones while the multiyear road map kept the project firmly on its path.

  7. Continuously prune and replenish the pipeline of initiativesIdeate, refine, renew, and repeat is a cycle that never stops, when done well. Our earlier research on organizational transformations shows that companies in the top quartile restocked their initiative pipeline by 70 percent after the first year, often compensating for initiatives that had been canceled. Maintaining such a healthy pipeline of growth projects, however, requires that companies adopt a rapid-learning approach.Continuously monitoring progress and pruning underperforming initiatives allows scarce sales and marketing resources to be redistributed to more promising efforts—and the faster that is done, the better. As for generating new growth ideas, networks of champions for each of the priority themes can be great sources for pipeline renewal: they can share lessons and success stories across regions and business units, often without the involvement of senior management.
  8. Measure and incentivize performance at multiple levels to focus interventions where they are needed mostManaging a growth transformation requires tracking numerous performance dimensions, from market demand to the competitive landscape to the progress of the initiatives themselves—factors that are both within and outside the management’s control. Performance management should include financial metrics as well as operational and leading KPIs. Many of these will be interrelated, and leaders should determine which are best managed at which level of the organization to create the right incentives and enable timely intervention. At a minimum, growth performance management should cover three levels:
    • Overall corporate goals. The top leadership team needs to understand how the growth transformation is driving the company’s top line. Connecting the growth project’s impact to the actual (or forecasted) revenues can reveal influences outside the initiatives’ parameters, such as foreign-exchange effects or sales declines in parts of the business not targeted by the growth transformation.
    • Growth transformation targets. Leaders of the transformation should track execution progress, operational KPIs, and financial impact for each initiative within the program. Creating a performance-management dashboard to monitor these metrics can enable them to address execution problems and redesign or even terminate initiatives quickly.
    • Functional performance. Take sales as an example. Companies whose sales organizations outperform their peers consistently excel in two capabilities: frontline execution through standardized performance management and analytics-driven opportunity identification and prioritization. These sales leaders are three times as effective and twice as efficient (based on gross margin to sales cost) as the median. Sales management should provide a single source of truth on forward- and backward-looking sales performance as compared to targets (such as order book and funnel) and incorporate this into frequent sales-performance dialogues so the insights the metrics reveal are translated into frontline action. The performance of other functions critical to reaching the growth aspiration, such as marketing, innovation, or corporate development, should have similar growth targets and analytics integrated into their performance measurement.

Delivering the growth your strategy calls for is a complex and challenging endeavor for most organizations, particularly during a downturn. To ensure the results meet the aspirations, companies can lean on the experiences of others to guide their targets and approaches to execution. While the temptation to wait for the current crisis to pass may be strong, it entails the risk of falling behind competitors who adopt a through-cycle approach to growth and emerge far ahead in the recovery.

Source: McKinsey.com, November 2020
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Strategic talent management for the post-pandemic world

Posted in Aktuellt, Board work / Styrelsearbete, Leadership / Ledarskap on November 22nd, 2020 by admin

As COVID-19 accelerates talent management trends, CHROs can take action now to craft a strong talent strategy for later.

In the COVID-19 era, chief HR officers (CHROs) are playing a central role in how companies reimagine personnel practices to build organizational resilience and drive value. There is no shortage of new responsibilities, from fostering connectivity early in the pandemic to developing and implementing plans for the return to offices.

Additionally, the COVID-19 crisis is now accelerating preexisting talent management trends in the CHRO playbook. By acting in five such areas, CHROs can craft a strong and durable talent strategy for the post-pandemic world.

  1. Finding and hiring the right people. Efficient and effective hiring continue to be important.For example, organizations are re-thinking the role of on-campus interviews in the hiring process, given the success they’ve experienced with remote interview methods. And since temporary labor is poised for a faster recovery, organizations should be ready to use that flexible labor in additional ways.CHROs should take a fresh look at tools that make it easier to connect people to employment, based on a deeper understanding of their skills and how those match with available jobs.
  2. Learning and growing. CHROs must consider the effects of large workforce transitions accelerated by the COVID-19 crisis and the key role that reskilling plays in helping close talent gaps.The agenda for post-pandemic learning and development extends beyond reskilling to three categories of cost-effective training:• Broad-based digital training in essential skills
    • Focused upskilling rooted in changing work
    • Leadership development
  3. Managing and rewarding performance. The crisis is accelerating shifts in how organizations manage and reward performance. It has dramatically affected goals and performance plans, while making remote workers further reliant on performance management for feedback.To encourage effective performance management now and beyond, CHROs should:• Transparently link employee goals to business priorities and maintain a strong element of flexibility.
    • Invest in managers’ coaching skills.
    • Keep ratings for the very highest—and lowest—performers but also celebrate the broad range of good performance.
  4. Tailoring the employee experience. The blurring line between work and life while working remotely means that employee experience is even more critical.CHROs must help establish norms of working that foster engagement and inclusion for all employees. The solution will be based on talent needed, which roles are most important, how much collaboration is necessary for excellence, and where offices are located today, among other factors.HR departments should also consider the range of analytics tools they can use to understand and promote connectivity and engagement, from social network analyses to listening tools such as mobile text platforms.
  5. Optimizing workforce planning and strategy. Given shifts in how value is created in the post-COVID-19 world, the talent base required may need to shift as well. Workforce planning, strategy, and change is the HR spending category that McKinsey survey respondents cite as most likely to increase over the next 12 months.Components of workforce planning and strategy include:• Critical roles. Research suggests that a small subset of roles is disproportionately important to delivering a business-value agenda. For each role, identify core jobs to be done, qualities needed of leaders, and whether the role is set up for success.
    • Skill pools. Organizations should look at their major skill pools to understand the skills required for the future and whether they are long or short on the required talent.
    • Talent systems. CHROs now have more workforce-planning tools to help them match people to jobs. Such tools will become increasingly critical for CHROs to meet the challenges ahead.

For more information, please read our article, “HR says talent is crucial for performance—and the pandemic proves it.”

 

 

Source: McKinsey.com, 20 November 2020
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The board’s role in embedding corporate purpose: Five actions directors can take today

Posted in Board work / Styrelsearbete on November 21st, 2020 by admin
A large spotlight is shining on corporate actions these days, and all stakeholders have growing expectations. A board’s involvement in defining purpose helps meet those expectations.
Multiple forces have increased attention on stake­holder capitalism, and most boards have not sufficiently grappled with the significant implications for their organizations. Last year, Business Roundtable, an association of CEOs who run major US corporations, committed member companies to serving the interests of all stakeholders, but their signatories have found it challenging to deliver fully on their promise. While 181 chief executives signed the roundtable’s statement, only one did so with board approval. Could boards have used this moment to engage more deeply with manage­ment teams to embed corporate purpose within their organizations—a role that fits squarely within a board’s obligation to enhance the company’s long-term performance?Democratization of information has increased scru­tiny of corporate actions and raised the stan­dards. As one board member told us, “Corporations exist with the permission of society, and any sector can be regulated out of business.” Purpose serves as the foundation that guides those actions and behaviors. In a nutshell, it is a company’s core reason for being. It answers the question, “What would the world lose if our company disappeared?” By articulating a clear purpose, anchored in measurable environmental, social, and governance (ESG) commitments and goals, companies can better deliver on societal expectations. Organizations that define their purpose and use it to guide their activities see a clear upside in improving company reputation, alerting management to risks early, establishing the organization as a leader in raising industry standards, and enhancing business performance.But delivering authentically on corporate purpose is difficult. As such, boards must ensure that their companies’ management teams understand the urgency of the issues that the purpose aims to address, and the potential value at stake.

The growing importance of purpose

Even before the pandemic, attention on corporate purpose and ESG was on the rise. Stakeholder groups, from investors and regulators to employees and customers, have increased pressure on businesses to address humanitarian, social, and environmental problems. A full third of global assets under management today are screened for ESG considerations, and investors are taking increasingly activist stances for sustainable corpo­rate practices. The Government Pension Fund of Norway, known as the Oil Fund, for example, has asked portfolio companies to share detailed plans to shift to a low-carbon economy, and voted to exclude three companies from its portfolio due to perceived violations of human rights norms.

Employee and consumer pressure is also growing. The reputations of some tech firms have been undermined by allegations of inequitable working conditions inconsistent with external statements, brought to light by employee whistleblowers. Recently, 65 percent of consumers declared they will buy or boycott a brand depending on its actions during the COVID-19 crisis.

Purpose and ESG commitments help companies address vulnerabilities and contribute to increasing shareholder returns. A compelling corporate purpose attracts talent and unleashes its potential, improving long-term employee well-being and quadrupling engagement. In fact, we recently quantified five links between a strong ESG propo­sition and improved business performance and long-term value.

Yet despite the value associated with purpose and ESG, and the risks that inaction poses, many companies struggle to rise to stakeholders’ expectations. Some take a check-the-box approach or bolt simplistic catchphrases onto existing corporate social responsibility reports. Superficial branding efforts around purpose that are not anchored in the organizational DNA only serve to undermine leadership credibility.

The board’s purpose agenda

How boards approach purpose and ESG differs based on regional regulations and norms, but a growing group of business leaders recognize that attention to all stakeholders is essential to protecting their companies’ interests. Companies oriented to the long term outperform short-term companies, given the material impact purpose and ESG can have on companies’ long-term perfor­mance, ensuring these commitments are ingrained within the organization and fall within the board’s mandate.

Board directors can serve as thought partners to the management team in developing a purpose narrative and embedding it in the organization. Purpose can become a guiding lens for board engage­ment on strategy, investments, risk and performance management, HR and culture, governance, and external reporting (see sidebar, “Applying a purpose lens to a board’s engagement with management”). In essence, purpose provides the North Star against which the board can stress-test key management decisions.

Below, we outline five specific actions around building, owning, assessing, reinforcing, and driving purpose (exhibit). These can assist board directors in partnering with management to create a purpose narrative with clear commitments and targets, fully embedding the purpose in the organization, and monitoring progress.

  1. Build an authentic purpose narrative with management. The creation of a purpose statement and a supporting narrative should not be a branding exercise but rather a deeply reflective process. Accordingly, boards should encourage top executives to take the time to understand all stakeholders’ perspectives on the company’s strengths, vulnerabilities, and relevant industry trends in developing the purpose.Board members themselves should engage with stakeholders to listen to concerns, as these can simmer under the radar until they boil over into a public backlash. One board was recently caught off guard when an employee used social media to raise concerns about the company’s contract with a foreign government. Boards need to create confidential channels through which employees can raise issues for their consideration in a safe way. They should also proactively monitor internal and external sentiment alongside management. For example, the board of a leading industrial company recently replaced a planned board meeting with a listening tour with employees on the shop floor. Such insights can help the board incorporate stakeholder concerns into the purpose orientation.
  2. Own purpose in board practices. Boards should ensure that purpose and ESG considerations are regular parts of their discussions. Further­more, one of the board committees should include purpose as part of its oversight. One UK financial services regulator pointed out that, given his agency’s access to the minutes of board meetings, “I can measure whether or not purpose and ESG are taken seriously.”Additionally, board composition criteria should include ESG expertise and diversity (in gender, ethnicity, age, and sexual identity). For example, only 10 percent of board members at compa­nies on the Russell 3000 Index are considered ethnically diverse, and women hold only 19 percent of board seats, suggesting signifi­cant room for improvement around diversity in governance.
  3. Assess purpose commitments, ensuring management sets clear and measurable goals, actions, and accountability. Purpose is made real when it connects to clear commitments, targets, and action plans that cascade down through the organization. The purpose statement should be specific enough to guide decisions on investments in time, capital, and other resources. A powerful litmus test of a purpose statement is to ask what the company should stop doing because of it. Board members can guide the management along this process by posing questions, pressure testing answers, and suggesting ESG metrics.The board should also encourage management to report externally on its progress in meeting the goals the company’s purpose sets out. For example, the Brazilian cosmetics company Natura &Co’s purpose is “to nurture beauty and relationships for a better way of living and doing business.” To support it, the company set ambitious goals around climate change, human rights, and economic circularity. Each pillar of its purpose strategy features specific initiatives, such as engaging supply-chain partners in ensuring sustainable sourcing and bolstering female empowerment through microfinance loans. Natura tracks and reports progress to both the board and in its annual reports. “They live and breathe this,” says a board member about the company’s management.
  4. Reinforce purpose lens in core board decisions. Boards can use purpose to pressure test decisions and trade-offs in company strategy, investments, risk and performance manage­ment, HR and culture, governance, and external reporting. For example, in 2010, the board of directors of Danish power company Orsted approved a long-term vision shift to support a commitment to the environment. In subsequent years, the company moved its portfolio from primarily oil, natural gas, and coal generation to renewable energy. By 2017, wind power accounted for 91 percent of Orsted’s earnings before interest, taxes, depreciation, and amortization and its market cap has grown 64 percent since its 2016 IPO. Boards should also be vigilant in monitoring manage­ment decisions that could undermine the stated purpose. For example, during COVID-19 some companies were criticized for laying off workers while instituting share buybacks or increasing executive compensation. Dissonance can also arise when a company engages with industry groups or lobbyists whose goals are inconsistent with the company’s purpose orientation.
  5. Drive organizational accountability for purpose through management evaluations and reporting. As part of its oversight role, the board should establish organizational accountability around purpose. At the highest level, it can link ESG performance metrics to compensation for the management team to ensure these goals are treated as seriously as profit and revenue targets. For example, Danone is factoring the cost of estimated emissions into its “carbon-adjusted” earnings reports. The board can also take the lead in celebrating purpose-linked achievements, and noble failures (such as products recalled for not meeting new ESG standards). Boards can encourage management to share inspiring stories with employees and the public, via annual reports, ESG reporting, and press releases.Importantly, the board cannot allow purpose and ESG goals to drop off its agenda during crises. The COVID-19 pandemic and the subsequent economic downturn have imposed unprecedented difficulties on many companies, but purpose-related considerations should guide decisions even—or especially—when orga­­ni­zations must make hard choices. Purpose can help companies evaluate short-term costs, such as offering employee-retraining programs in place of layoffs and loans to suppliers, as important investments in a better future—for both their stakeholders and society as a whole. Fundamentally, purpose is about leadership, and companies need all their leaders to provide purpose-driven inspiration during difficult times.

    Source: McKinsey.com, 20 November 2020
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Hur påverkar det nya aktieägardirektivet er?

Posted in Aktuellt, Allmänt, Board work / Styrelsearbete on October 29th, 2020 by admin

Johanna Sommarlund är delägare och konsult på Novare Pay, ett bolag som arbetar med ersättningsfrågor för ledande befattningshavare. Under 2019 blev EU:s aktieägardirektiv svensk lag vilken får stor påverkan för många bolag.

Vad är aktieägardirektivet och vad det tjänar till?
– Enkelt sammanfattat togs aktieägarrättsdirektivet fram för att stärka aktieägares ställning och försäkra att besluts fattas för bolags långsiktiga stabilitet. Direktivet behandlar bland annat frågor om ersättning till VD och vice VD och förhoppningarna hos EU-kommissionen var att aktieägarnas möjlighet att ta ställning till ersättningsfrågorna ska skapa en bättre koppling mellan företagsledares prestationer och löner.

Vilka av era kunder påverkas och vad är nytt?
– Direktivet omfattar bolag som har sitt säte i en EU-medlemsstat och är noterade inom EU. De statligt ägda bolagen och bolag som följer Svensk Kod för Bolagsstyrning omfattas också av de nya reglerna. Direktivets räckvidd är alltså omfattande och det här innebär att flera av våra kunder nu måste anpassa sig efter de nya reglerna. Ersättningsriktlinjerna, som nu är mer omfattande än tidigare, lades fram och godkändes tidigare under 2020. Till årsstämman 2021 ska nu för första gången en ersättningsrapport upprättas och publiceras, något som är en helt ny utmaning för dessa bolag.

Vad är viktigt att ha i åtanke med anledning av de nya kraven?
– Till att börja med bör de berörda bolagen starta sitt arbete med ersättningsrapporten nu, om inte igår. Det är en lite trasslig rapport att ta fram och det kommer att krävas noggrann kartläggning och diskussion internt för att arbeta fram den information som rapporten ska innehålla. I vår rapport ”Ersättningsrapport 2020” har vi gjort en sammanställning och bland annat ska data som sträcker sig över de senaste fem räkenskapsåren redogöras för och bolagen bör därför tänka över hur och med vilka mått resultaten ska redovisas. Ersättningsriktlinjerna ska också följas upp och ställas i relation till hur ersättningen faktiskt har sett ut, så det är helt klart en ökad arbetsbörda som faller på de publika bolagen.

Hur hjälper ni era kunder i arbetet med rapporten?
– Vi är specialister på ersättningsfrågor och arbetar med alla frågeställningar som kan uppstå på området, såväl i rollen som projektledare som bollplank. Även om ersättningsrapporten är en ny utmaning, kan vi genom vårt breda nätverk och kundbas bilda oss en god uppfattning om hur trender och normer utvecklas. Vi har möjlighet att se frågan ur ett helhetsperspektiv och kan därför identifiera problem och lösningar så att våra kunder kan få hjälp med alltifrån specifika tolkningsfrågor till att ro hela rapporten i hamn.

 

Källa: Novare.se, oktober 2020
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How to plan a successful leadership succession at a start-up

Posted in Aktuellt, Board work / Styrelsearbete, Leadership / Ledarskap on October 20th, 2020 by admin
After spending ten years turning their start-up into a highly profitable unicorn business, the cofounders of PropertyGuru were able to successfully hand over the reins of the business and safeguard its continued success.

When founders decide it’s time to move on after nurturing their start-up into a successful enterprise, years of hard work can quickly come undone if they don’t plan the leadership transition well. Steve Melhuish, cofounder and former CEO of PropertyGuru, spoke to McKinsey’s Tomas Laboutka about the painstaking transition process he and his cofounder put in place to ensure the success of the company and its new CEO.

Key insight #1: Business founders need to recognize when it’s time to turn control of the business over to someone else.

Tomas Laboutka: There are numerous success stories of start-ups handling leadership succession well, but also countless examples of failures. When did you know it was the right moment to bring in a new CEO for PropertyGuru?

Steve Melhuish: It was a personal decision. My cofounder, Jani, and I bootstrapped the company, building it from scratch into a regional market leader in ten years. It was a grueling and relentless time, as we worked seven days a week, without vacation and with little salary, for most of that period.

As my twin children approached their third birthday, I realized I’d missed so much and was scared that I would miss their formative years unless I took action. So I decided my priorities needed to change and promised my wife I’d hand over operations of the business by the time the kids were five years old.

I discussed it with Jani, and he was reaching a similar conclusion, having recently had a son. We knew it would be a complex, challenging, and lengthy transformation and transition process, so we set the wheels in motion early.

Key insight #2: Laying the foundations for a successful leadership transition can involve several years of planning.

Tomas Laboutka: How did you communicate your intention to your investors, partners, and employees?

Steve Melhuish: We presented our proposal to the board in 2014 by explaining that every leader needs to plan for an eventual succession. The shareholders at that stage were understandably concerned, since they’d invested in a founder-led business for two years and worked alongside us.

In addition, while we already had a presence in four countries at that time, 96 percent of our revenues were generated in Singapore, primarily by Singapore real-estate agents. And decision making within the company was still largely concentrated with me and Jani, so we lacked depth in our regional leadership and middle management.

So we agreed to a three-step plan focused on revenue diversification and professionalizing the organization before identifying and transitioning to a new CEO. We made a commitment to the board to execute this plan over the subsequent three years.

To support revenue diversification, we heavily increased product, team, and marketing investment in Indonesia, Malaysia, and Thailand. We also added a fifth country to our portfolio by acquiring Vietnam’s market leader. And we acquired two companies focused on serving real-estate developers, to enhance our value proposition to these valuable clients.

We hired the company’s first CFO, CMO, CTO, and CHRO and invested in new IT systems and processes underpinning these functions. Additionally, we invested in training and development to help increase our middle-management capability.

Nine months after starting this transition process, we successfully completed PropertyGuru’s largest round of funding. We made it clear to the prospective investors right at the outset that we were in the middle of a transition that would hand over control of the company to a new CEO in roughly 18 months. But at that stage, we didn’t yet communicate our succession plan to employees, since we wanted the whole team laser-focused on our business priorities: diversification and organizational development.

Key insight #3: Taking the time to choose a new CEO who fits a carefully considered candidate profile can reduce the risk of ‘organ rejection.’

Tomas Laboutka: Finding a replacement for cofounders who helmed the company for a decade couldn’t have been easy. How did you design the CEO selection process?

Steve Melhuish: Bringing a new CEO into a ten-year-old, founder-led business is clearly a high-risk proposition for the founders, company, and shareholders, all who worry whether the new CEO will fit in and enhance, or damage, the company. It’s also high risk for the incoming CEO, who worries whether the existing company culture is a good fit for him or her and whether the founders will actually step back to let him or her do the job unencumbered.

The process we designed was aimed at not only identifying the best CEO but also minimizing the risk of “organ rejection.” The candidate profile we developed placed a heavy emphasis on culture, values, and talent development, as well as experience in building fast-growing businesses. We aligned with and received support from our board members and then hired an executive search firm we’d had success with in the past placing some of PropertyGuru’s CXOs.

We were surprised at the quality of the shortlist and how quickly it came together. Many of the candidates were well-known senior executives leading large Asia Pacific or Southeast Asia teams for Fortune 100 tech firms. We were taken aback that talent of this caliber would want to join a much smaller, earlier-stage private tech firm.

However, it became clear during the interview process that some candidates were frustrated by bureaucracy, politics, slow decision making, low Asia investment, and the lack of significant “face time” with stakeholder management back at headquarters. Given their lack of decision-making authority within their large organizations, candidates were attracted by the prospect of owning the full P&L, functions team, and strategy in a smaller company.

In the final stage of the hiring process, the top three candidates presented their growth plans for PropertyGuru during a two-hour interview with Jani, me, and the board. The CXOs were involved and conducted background checks, including via back channels with team members, customers, and suppliers. We ultimately selected Hari Krishnan, who had successfully built and was leading LinkedIn’s Asia Pacific business. It turned out to be a great decision.

Key insight #4: Smooth leadership transitions require meticulous planning, transparency, and patience—before, during, and after the handover.

Tomas Laboutka: How did you ensure your new CEO fit within the culture of PropertyGuru? How did you prevent “organ rejection”?

Steve Melhuish: We implemented a three-step process to reduce this risk, which included coaching, a pre-handover soft landing, and post-handover founder support. We created a new chief business officer role, which owned all commercial aspects of the company, for Hari for the first nine months. Hari, Jani, and I also met weekly, and through this process we were able to accelerate learning and guide Hari on any historical or personnel issues.

This enabled Hari to accelerate his onboarding, deliver some wins, build credibility internally and with the board, and determine whether PropertyGuru was a good fit for him. At the same time, Jani, the board, and I had the opportunity to monitor progress against expectations, assess the cultural fit, and minimize risk before handing over the keys to the company.

We also hired an executive coach for the first four months of Hari’s tenure with PropertyGuru. This involved individual coaching for me, Jani, and Hari to help us manage any specific concerns and expectations. We later moved to group coaching sessions to bring out and address any bigger issues. It was a highly uncomfortable but highly valuable process.

After nine months, I announced my handover of the CEO role to Hari via a live broadcast to all PropertyGuru offices, followed up by an email and live town halls with all three of us in each of the five countries where the company operates.

We also reassured the team that Jani and I remained committed to the company and would continue working within the organization, as well as on the board of directors and as shareholders.

Over the next 12 months, I moved to the back seat, handing over responsibilities and decision making as Hari, Jani, and I continued to meet weekly to review progress and issues. By January 2018, I had handed over all operations and was able to shift into a half-time role working on strategy, M&A, and some key client relationships.

The transition process took three years and was incredibly smooth, thanks to a well-managed and phased approach, strong board support, as well as empathy and openness between Hari, Jani, and me.

Key insight #5: Planning a successful leadership transition also includes contingency plans for failure.

Tomas Laboutka: The leadership transition seems to have worked out quite well. You recently reported strong growth figures, and PropertyGuru is profitable. What if the transition hadn’t worked out? Did you have a contingency plan?

Steve Melhuish: Business momentum has continued throughout the process, and we recently reported strong annual results, with 24 percent revenue growth, 64 percent EBITDA growth, and an increased market leadership position across the five countries where PropertyGuru operates. The succession was a success. Hari and the team have done a great job building on the foundation created by Jani and me over the first ten years.

As with all plans, though, success is never guaranteed. Our contingency plan in case of failure was for Jani and me to step back into the business. Underpinning this possible scenario was the phased process over a three-year period, which included working full-time alongside the new CEO for 15 months after the formal announcement. After the CEO transition announcement, we remained fully engaged in the business. We were involved in leadership meetings and social activities with the CXOs, engaged with the wider team, held weekly meetings with the new CEO, and maintained full visibility of key priorities and challenges. This minimized the risks and also enabled Jani and me to assume leadership again at short notice, if necessary.

Key insight #6: Cutting the cord to a business you’ve poured years of your life in to building can be painful but also opens up exciting new opportunities.

Tomas Laboutka: Looking back, what was the most difficult aspect of the leadership transition and how did you resolve it?

Steve Melhuish: I’m grateful the transition process went smoothly, and the results speak for themselves. The most challenging aspect of the leadership transition was actually on a personal level. Despite initiating and driving the succession plan for more than two years beforehand, I struggled with turning over the reins, and it took me close to a year after the announcement to adjust to this new reality. I realized it was hard to just switch off and step back after ten intense years of building a business. I also discovered that I had an ego. I enjoyed leading the company, calling the shots, and being interviewed by the media. I missed social interactions with the team as well.

I struggled emotionally, had a crisis of confidence, and suffered from lack of purpose. It was during this time that my wife remarked, “You’ve achieved all you set out to do, but you are now more miserable than I’ve ever seen you. Do you want the CEO role back?” My answer to her was an emphatic “no.” My priorities had shifted, and I was determined to spend more time with my family, while thinking about “what next?” This started the process of my transitioning into a more positive mode.

Thankfully, I had amazing support from my wife and my Entrepreneurs’ Organization colleagues. I also received coaching from some fellow founders who’d been through similar experiences when exiting their start-ups.

I began meditating, exercising more, going on vacations, reengaging in the regional start-up scene, and investing time and money in the climate and social-impact space. Two years later, I’m having fun. My last ten angel investments have all been in the sustainability space, and I’m working with some inspiring start-ups, founders, investors, and organizations.

Source: McKinsey.com, October 15, 2020
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Talent retention and selection in M&A

Posted in Aktuellt, Board work / Styrelsearbete, Executive Team / Ledningsgruppsarbete, Leadership / Ledarskap on October 14th, 2020 by admin
Retaining critical talent and ensuring the right people are in key roles are essential to a successful merger.

An organization is only as good as its peopleas the adage goes. At no time is that more true than during a merger integration. A deal can create an opportunity to upgrade talent across the organization; in some cases, gaining access to highly skilled employees is the primary reason for an acquisition. Conversely, mismanaging talent issues can seriously affect the success of even a relatively straightforward transaction.

Organizations undergoing a merger need to tackle two core challenges around talent: how to retain people critical to the combined company’s performance and how to manage the employee selection and appointment process in a way that causes the least disruption and anxiety. Thorough preparation and management of both processes is paramount to achieving a merger’s goals. This article presents our insights into talent issues that arise during M&A and how to handle them to foster a smooth transition.

Understand your merger archetype

Managing talent in a merger integration should not follow a one-size-fits-all approach. Rather, the type of deal you pursue needs to guide how you go about employee retention and selection.

In the case of two organizations of similar size coming together in an approximate merger of equals, both the acquirer and the target company need to pay close attention to retaining key talent. This type of deal often happens during industry consolidations or when a company is trying to reinvent itself by acquiring a competitor with complementary products and customer relationships. While leadership teams tend to protect their own core cadres and corporate cultures, the focus here needs to be on keeping the people best suited to driving the combined company’s performance. Accordingly, a fair and transparent selection process is needed to avoid (real or perceived) biases or favoritism on the part of either legacy company.

When a larger, often better-performing company acquires a smaller or lower-performing firm that operates within its core business, employee selection tends to favor the acquirer’s incumbent talent. In such cases, the acquirer’s retention focus may be quite narrow, aimed at the best performers or employees deemed critical for maintaining business continuity.

In an acquisition involving the entry into a new business or market, the buyer’s talent retention focus will likely be quite different. Typically, retaining the target firm’s employees is essential to the deal’s value, and there is usually limited overlap between the target’s workforce and that of the acquiring company, aside from support functions.

Tailor your talent retention strategy

During the anxiety-filled period of merger negotiation and integration, talent deemed critical to the combined company’s future needs to receive special attention. Since talent flight can undermine performance, value creation, and both the near- and long-term success of the deal, organizations should develop talent retention plans as soon as possible—often before the acquisition is finalized.

The key steps in a talent retention program are determining its scope and approach, defining retention levers, and implementing and monitoring the results.

Determine retention scope and approach

In most merger scenarios, the vast majority of employees do not receive retention packages—typically, less than 2 percent of staff should receive such incentives. However, those few critical employees need to be identified quickly. They could have highly specialized and hard-to-access skills or knowledge vital to running the combined business (such as expertise in the legacy IT systems). They may be important for ensuring stability during the integration phase or they may be high performers essential to building the next phase of the combined organization.

For example, when a global medical device company acquired a small but fast-growing healthcare solutions firm, the target’s product innovation capabilities were a core reason for the deal. The acquirer’s CEO knew he had to move quickly to engage and retain the R&D team, so the head of the integration group promptly flew across the country to meet with the staff, reassure them about their roles in the future organization, and express the company’s enthusiasm for their product innovation plans. The integration leader also committed to ring-fencing the R&D team to allay their concerns that the multinational’s “bureaucracy” would stifle their activities. All the core innovation staff ended up remaining with the new company, with limited financial retention investment required.

It can be challenging to identify the most valuable individuals or know which ones represent a flight risk. Often, top leaders create lists of employees they feel are important to retain—a top-down approach that, being fast and simple, is well suited to mergers with short time frames and high potential for significant loss of talent. However, unless an organization had recently undertaken a talent-to-value exercise, top corporate leaders may lack a comprehensive understanding of the critical talent and roles in the company. As a result, the company may end up offering retention bonuses to too many people, some of whom do not hold essential roles, potentially causing integration cost overruns. Conversely, complex hierarchies or unconscious biases may shield top executives’ views of who really matters in the legacy company, leading to omissions in retention efforts that end up costing the combined company valuable capabilities.

A more comprehensive but time-consuming alternative is a bottom-up approach, which gathers input from multiple management tiers and combines it with other information, such as employee interviews, surveys, or social network analysis. While this provides leaders with a more detailed understanding of the talent they should try to retain—including people at lower levels of the organization—it is not always feasible given pre-close limitations on who can be engaged for input and what information the target company will provide.

A solution that balances the above two approaches is for the legacy heads of each function and the HR business partners of both organizations to nominate the 2 percent “critical talent” in each area—individuals in mission-critical roles, high performers, or those with strong future potential. The HR team can then vet the list with the CEO, the chief human resources officer (CHRO), and the integration leader to determine the need for retention incentives based on the impact and probability of each individual’s departure. (For more on identifying critical talent, see “Matching talent to value” and “Finding hidden leaders”.)

Define incentives

 

Talent-retention programs typically target critical employees the company believes it may lose with a mix of financial and nonfinancial incentives. While financial measures tend to be the first lever organizations turn to, this approach can be both expensive and often less effective than companies anticipate. Financial incentives are best used for addressing short-term needs, such as inducing a finance manager targeted for layoff to stay for a few months after merger close to help with the transition from legacy financial processes to new ones adopted by the combined company. Generally, however, organizations should lead with “soft” incentives such as praise, attention from leaders, and opportunities to take on more responsibility, all of which have proved to be more powerful at keeping talent motivated. A McKinsey survey of more than 1,400 integration executives, for example, reported that “praise and commendation from an immediate manager” was the most effective retention lever, scoring above performance-based cash bonuses and increases in base pay.

In general, incentives should be offered in waves rather than at one time, as not all essential employees will be immediately known to management. Additionally, leaders may find that some highly valued talent does not need special incentives to stay after the deal is announced.

Implement and monitor retention

Once companies have identified their critical talent and determined suitable incentive plans, they should waste no time in implementing the retention program. With financial incentives, it is usually best to conduct the program discreetly so as not to alienate those not offered incentives to stay. There is much less sensitivity around the many nonfinancial retention levers, such as opportunities to participate in training programs or invitations to lead projects, as these are common incentives or rewards for high-performing individuals. With both retention approaches, perceived fairness is critical. In particular, functional heads and HR staff need to be prepared to answer questions about the methodology and thoroughness of the process that determines which individuals receive financial bonuses.

Tracking the impact of the talent retention program is important, both as it applies to the overall workforce and employees identified as critical. Companies can use metrics such as unwanted attrition, turnover costs and employee satisfaction, and should be proactive in adapting the retention program in response to the findings. For instance, engagement surveys can deliver early alerts of declining staff morale, providing time to reengage select employees or employee groups before they decide to move on.

Selecting the right talent

Identifying the candidates for key positions in the combined company is a priority that HR leaders should start addressing even before the deal closes. From determining the selection criteria to communicating, implementing, and tracking outcomes, the decisions made at this stage will bear heavily on the integration’s success. This is particularly important in deals involving the merger of similarly sized firms as such situations require more finesse than other M&A integrations.

At a time when companies are competing for talent in a global arena, offering a positive employee experience—by enabling staff to create personalized, authentic workplaces that ignite their passion and give them purpose—is a key driver of retention, especially among millennials. Our research shows organizations that focus on employee experience as a core element of talent management have a 65 percent chance of achieving superior total returns to shareholders.

Designing, managing, and delivering a positive experience is especially important during the post-merger talent selection process—not only for employees offered positions but also for those not selected or who choose to leave. How the HR and integration teams treat the latter groups can have far-reaching effects on workplace morale and the company’s reputation as an employer of choice.

There are four core elements to ensuring that the selection process leaves a positive impression on all involved: designing a fair and transparent methodology, ensuring the process is well coordinated, managing stakeholder expectations, and effectively onboarding employees starting new positions. Most of these tasks are best handled by a central talent selection office.

 

Establish a fair and transparent process

“Will I have a job in the new organization?” During a merger, that is the primary concern of most employees, so step one in the talent selection process should be providing information. Defining how staffing choices will be made—including selection criteria, legal parameters, and timelines—and communicating this to the organization will help allay anxiety, as will an explicit commitment to fairness and transparency.

Naturally, the approach to selecting high-level executives (such as those reporting directly to the CEO) will differ from the one used for most of the workforce. While the executive selection process is often opaque to the broader organization, the outcomes send a message to all employees about the values and culture they will experience in the combined organization. For example, if the CEO only selects individuals from the acquiring company for the new management team, this may be interpreted as a signal that the acquirer’s employees will be favored for lower-level positions as well, creating the risk of critical talent leaving the acquired company.

Typically, at least the top two levels of leadership below the CEO are chosen before the deal closes, usually by the combined company’s chief executive, and the appointments are often subject to board approval. In selecting direct reports, the CEO should first focus on roles essential to maintaining business continuity along with those needed to fulfill the growth or transformation ambitions that motivated the acquisition. For example, if the CEO is moving from a sales-led geographic structure to a more matrixed brand structure, selecting a chief marketing officer should be a top priority, and if no sufficiently strong candidate is present at either organization, the company should quickly launch an external search. Furthermore, the new leadership team ideally should be introduced to the organization as a group rather than through appointment announcements over time, as a one-time transition in management will help lower uncertainty and distraction among employees.

For the rest of the staff, the selection principles and process should be communicated as soon as possible to reassure employees that the methodology will be consistent and equitable. The principles are typically developed by the CHRO, endorsed by the CEO, and shared with the employee base as the talent selection process kicks off. They may range from strategic, outcome-oriented goals (such as supporting and protecting the core businesses and enabling the vision for the combined company) to specific guidelines (for example, if a position in the new organization consists at least in half of new responsibilities, all eligible employees from both companies can apply for it).

What matters most is that the principles resonate with the organization and increase confidence in the process. They should address questions such as: What does the talent selection aim to achieve? Will employees from both companies receive equal consideration for positions? Who decides who will be offered positions in the merged company? And, will downgrades, grandfathering, relocation, trial periods, and other individual factors be part of the decisions?

The selection process also needs to establish “guardrails”: legal parameters by which decisions must abide, such as regulatory approvals, the WARN Act (for US businesses) and works council stipulations (for European businesses mostly) that apply to HR practices and may vary by role, geography, and timeframe (for example, pre-close, day one, and post-close). Such guardrails are typically shared only among HR employees responsible for defining and executing the selection process and with managers involved in conducting interviews or choosing talent for the new company. The parameters should be defined and disseminated as soon as possible after the deal is announced and reviewed regularly by the general counsel overseeing the integration.

Finally, management needs to define and communicate the criteria, process, and timeline for selections. These are often constrained by how quickly a company needs to make staffing decisions, how involved direct managers are in the process, and the availability and quality of talent assessment data. Typically, the criteria cover the following kinds of questions:

  • How do you define the talent pool eligible for each role in the new organization (for example, can potential candidates come from both legacy companies)? If someone is not selected for a CEO-2 role (reporting to a CEO’s direct report), can the individual be eligible for a CEO-3 role? Could he or she be offered positions in other parts of the company?
  • What guides the selection when multiple incumbent employees apply for a role?
  • What data (such as performance ratings or R&D patent applications) and other inputs (resumes, for example) are considered and how do you calibrate their relative importance given different practices in the legacy organizations and potential functional or individual biases?
  • For which roles will you conduct interviews or seek additional internal or external applicants, and how will you source external talent if needed?

In terms of schedule and time frame, the following questions should be answered:

  • Are you prioritizing talent selection by seniority and level of responsibility, or handling multiple employee tiers at once?
  • When will candidates be notified, when will new roles begin, and what will be the exit dates for those leaving?
  • Will the dates vary by office location or country?
  • What do HR business partners, managers, and other decision makers need to do, and by when, in order for candidates to be notified of selection outcomes by a certain date?

Establish a central office to coordinate selection

Deciding which employees should stay, go, or move to different roles is often a complex process involving many decision makers and urgent time pressures. If managed poorly, it can cause the new company to lose critical talent and capabilities, miss synergy targets, face business disruptions, and even risk lawsuits and reputational damage. What’s more, during the hectic integration period, the HR team often lacks the capacity to adequately support talent selection, especially as the department is likely undergoing its own functional integration. Creating a talent selection office (TSO)—a temporary, centralized command group—can improve the employee experience, produce better selection outcomes, and reduce potential legal risks.

A TSO is particularly valuable during large employee reorganizations driven by ambitious synergy targets and undertaken within short time frames. It can also play a vital role in ensuring exits happen quickly when one or both of the merging companies operate in multiple geographies or industries with complex labor laws or strong union relationships. For example, when one US-based company acquired a European firm of similar size with a significant number of employee overlaps across numerous regions and functions, it established a temporary TSO and placed a member of the target company in charge. Not only did the central TSO enable the combined organization to reach its synergy targets roughly six months ahead of schedule, but the choice of lead helped reassure the target company’s employees that the selection process would be fair to them.

As the command center, the TSO is responsible for guiding leaders involved in the selection process in how they manage organizational anxiety around potential head-count reductions. This includes instructing managers and job candidates on the interview and selection steps and timelines and coordinating with the communications team of the central integration management office (IMO), where appropriate, on responses to questions about the process. The TSO also ensures that the employee choices align with the new organization’s strategy, desired culture, and synergy objectives related to employees, and that the selection and retention processes adhere to the established principles and other guidelines.


Communicate with stakeholders

 

Typically, the TSO is also responsible for the third element of the selection process: managing stakeholder expectations. This can range from defining who will be consulted in talent selection decisions to helping managers conducting interviews understand how much time is required and when they need to commit. The TSO needs to become the “one source of truth,” tracking decisions in real time and making sure systems are updated promptly and accurately.

Doing this effectively requires regular communication among several stakeholder groups, including the IMO (to coordinate the timeline with other integration activities), employees involved (both those who interview or select candidates and the candidates themselves), the communications team (to align messaging related to talent, such as the announcement of a new leadership team), and finance and IT (to coordinate updates to HR management and payroll systems). The TSO also needs to be in close touch with the company’s HR partners to coordinate the execution of the selection process, as when new external employees are brought onboard.

Onboard employees into new jobs

Once talent selection is completed and announced, the talent team often thinks its job is done. However, the selected employees still need to be properly onboarded. Given the intense pace and workload before, during, and right after a merger, this crucial step is often neglected, leaving employees who start new jobs insufficiently prepared for the realities of the merged organization.

To avoid a decline in workforce performance and employee experience, the TSO should work with HR staff and line managers to define the onboarding requirements, at least for critical roles and talent. It should also solicit feedback from employees on their experience of the integration process and report that to the IMO.

Källa: McKinsey.com, October 2020
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