In his recent doctoral dissertation, "Motivating Boards for Sustainability: The Role of Member’s Motivation and Diversity in Board Social Responsibility," DI, MSc Klaus Breitholtz studied the motivations of board professionals and their ability to promote corporate social responsibility (CSR). To incorporate CSR into the business culture, an organisation must intentionally operate as part of society and the local community, as well as promote diversity and wellbeing among its employees.
Board professionals, regardless of age or gender, are motivated by a continuous desire for development, new challenges, and common goals. Diversity, such as the inclusion of all genders on the board, as well as an increase in the number of independent board members, positively impacts a boards’ ability to act responsibly.
Breitholtz, who also works as a board member, wanted to gain a deeper understanding of the factors that motivate professionals in boards and promote CSR. He states,"Board work has been studied quite little, especially in the Nordic countries, and there is not much known about boards' responsibility. In my dissertation, I examine how individuals' motivational factors and board team diversity affect the company's social responsibility. Business professionals are motivated by a desire to challenge their own skills and a passion for getting things done to ensure the company's success. They want to work towards a common goal. Motivation is also increased by the decision-making power associated with board work, allowing things to happen."
"The more diverse and larger the board, the more attention is paid to the company's social responsibility," says Breitholtz. "According to my research, board satisfaction with their own responsibility level was higher in companies where the board's average age was higher. Younger members, on average, felt more strongly than older members that the organization’s level of responsibility was not where it should be. I believe this is because younger board professionals approach responsibility more ambitiously than their slightly older colleagues."
Increasing Focus on Responsibility
According to Breitholtz, the discussion around responsibility is still somewhat unclear, and measuring responsibility remains challenging. "Companies have long paid attention to environmental issues such as emissions, recycling, energy efficiency, and good governance. In my dissertation, I specifically focused on social responsibility."
A socially responsible company gives attention to employee well-being and acts as a good corporate citizen. "In Finnish companies, employee well-being and skill development are generally well taken care of. Many companies have invested for decades in the well-being of employees, with employers providing affordable housing and health services to factory towns. Social responsibility is also seen as a competitive advantage in recruiting the best talent. It also involves fair compensation and pay equity."
“There should also be fairness towards distributors and suppliers. This has clearly been given less attention. Could there be flexibility towards partners when needed, for example, in payment deadlines?" emphasizes Breitholtz. "There is a need for good and trusting communication.”
The rapid changes in the business environment and the fast pace of technological development also affect boards, according to Breitholtz. “Work methods need to be renewed, and it is good to increase the diversity of board thinking. The right capabilities, effective tools, and regular self-assessment are needed for board work to develop and serve business growth and internationalization. I believe board work will become increasingly active. The ability to leverage data and artificial intelligence also offers new opportunities to understand international markets and boost business vitality. Social responsibility requires money and resources, and it should not be confused with charity.”
Breitholtz's Findings:
- A continuous desire for development and new challenges motivates business professionals to work on company boards. Money is not a significant motivator.
- The owners' intentions and the chairman’s ability to lead the board as a team significantly influence board members' motivation.
- Board diversity, independent board members, and an increase in the size of the board enhance the board's social responsibility. The more diverse and larger the board, the more positively it works towards social responsibility.
- The “old-man syndrome” in board thinking could pose a threat to the company’s future vitality.
Breitholtz is also the CFO and a board member of a biotech company named Genevia Technologies. He is also the outgoing chairman of Future Board, a network of young board professionals, and the youngest member in the history of the Hallituspartnerit Association board. Breirholtz has already taken what he discovered in his research and is actively applying his findings to his own board and corporate work.
Admincontrol has been collaborating for several years with Future Board’s network of young board professionals. “We want to contribute to Future Board’s efforts to improve the future of board work. We also support work that fosters company growth through active board participation," says Henrikki Hirvonen, Finnish Country Manager of Admincontrol.
In Conclusion
Incorporating corporate social responsibility not only enhances a company's reputation but also fosters long-term growth by creating positive societal impact and building stronger relationships with stakeholders. The research that Breitholtz conducted has solidified his place as a trailblazer and promoter of CSR best practices. Admincontrol is thrilled to watch and be part of the work he has done and will continue to do.
