Do you really want to transform your organisation in a value-driven way?

Statutory Principle 2. A Stakeholder Board

The bodies of a conventional company consist of a general meeting of shareholders, a board of directors and, if the organisation is large enough, a trade union to represent the staff. This division creates a ‘party’ thinking with seemingly own – often financial – interests. This distracts from the raison d’être, the mission of the organisation, and can create imbalances between stakeholders. In addition, certain stakeholders, such as customers and society, are not formally involved in the bodies, with the risk that their interests would be forgotten.

In order to keep a shared mission central, a stakeholder board is set up in which all stakeholders are equally represented. The board of directors determines which stakeholder categories are defined, with a minimum representation of the financial stakeholders, customers, employees and society. If the entrepreneur is still active in the organisation, he is included as a separate stakeholder.

The management is given a period of two years to complete this stakeholder board. If it fails to do so, it must be able to demonstrate that sufficient effort has been made, with dismissal as a sanction if this has not been done.

The stakeholder board can be set up by election, drawing lots of candidates or at the invitation of the board of directors, and meets in principle twice a year. A rotation system is introduced to chair the meeting. The main purpose of the meeting is to test the activities and status of the company against value creation.

In concrete terms, any value violations are brought forward with proposals for solutions, and suggestions are made to increase value per stakeholder. This discussion can optionally take place using the Happonomy scorecard, which is a tool with scoring mechanisms per stakeholder.

A report is submitted to the board of directors and the CEO of the organisation containing the identified value violations and consensus proposals for value improvement per stakeholder.

The Board of Directors can be modelled as a stakeholder board, which means one body less. The reason why this is not done by default and a separate body is created is mainly because of the legal liability of its members.