Sveaskog manager comments on Ekonord board's work

In 2008, a new Swedish risk capital company called Ekonord was launched. Sveaskog's former marketing manager Sven-Erik Gustavsson is on the Ekonord board. Here is his account of what this entails.

Ekonord invests in green technology companies in Sweden's four most northerly provinces. Together with Eon, LRF, Länsförsäkringar, Milko, ICA and Sjätte AP-fonden, Sveaskog is investing a total of MSEK 140 in the company, whose head office is located in Trångsviken, in the province of Jämtland.

In the autumn of 2008, Sven-Erik Gustavsson was invited to join the company's board. This was his first significant, external directorship, but he has vast experience of forestry having worked in the industry for almost 40 years.

Broad experience of forestry

During his career Sven-Erik Gustavsson has held the positions of timber manager, administrator, sawmill CEO, worked with technological and business development, and been responsible for Sveaskog's timber sales, timber purchase and logistics, a business area with a turnover of some MSEK 9. This time span also means that he was involved in the changes when Domän AB became AssiDomän and then Sveaskog.

"I often had to get involved in new activities that were problematic. The goal was to bring about a "turn-around", which is to say sort out the shortcomings and create profitability again. This has given me a broad knowledge of different types of management questions, which has been very beneficial over the years," says Sven-Erik Gustavsson.

A different kind of company

In accepting a position on the Ekonord board, Sven-Erik Gustavsson has been given the opportunity to apply his operative experiences in a new context. It certainly proved to be a different kind of company with its eight founders all involved in the agronomy industry – including forestry and agriculture. There are no other companies with this type of ownership structure on the market, which made the prospect of joining it all the more interesting.

The initial work of the board mainly concerned establishing the company's strategies and method of working on the basis of the founders' declaration of intent. There were many meetings for Sven-Erik Gustavsson and the other board members during 2009 and many decisions were taken on these aspects in particular.

"Even at an early stage, we were also under considerable pressure to find suitable companies to invest in. Now, in retrospect, it feels good that we didn't take things that far at that stage. In my opinion, we weren't ready to enter into new investments then. What we needed to do was develop good support and decision making procedures as well as other ways of facilitating the board's work," he says.

The importance of laughter

Sven-Erik Gustavsson emphasises that this type of process must be allowed the time necessary for all those involved to correctly understand and gain insight into the intentions of the owners. This is needed for strategies to be properly grounded.

"It concerns establishing an atmosphere and a culture within the board and this process cannot be hurried. Actually it is largely the same process as the ones I have been involved in many times in my operative work, which is to say, firstly to formulate a vision or business concept, then concretise it, establish goals for it and develop strategies on the basis of it. It is also equally important to create an enthusiasm for what is to be achieved and to follow up and communicate the goals and results as the process moves forward," says Sven-Erik Gustavsson and adds:

"It is also very important to have fun together. The number of laughs produced by a group is a good indication of how well the people in it connect."

Dare to take a stand

When it comes to Sven-Erik Gustavsson's own contribution to the board's work, he strives to establish structure and order.

"I am not afraid to voice my opinions and have a clear standpoint on different questions," he says. "It is important for me that we are concrete and can make decisions."

What then are the most challenging questions for a relatively new board member in an investment company such as Ekonord?

"Knowing whether we are investing well or not, which is to say deciding whether to invest in a company or not. Having decided to invest in a particular company, the next difficult decision is how much to invest. Financing aspects such as how the actual investment should be formed are something new to me."

Another classic situation is where to draw the line between strategic and operative. How does an experienced line manager handle this?

"It is important not to get involved and forward opinions regarding the actual activities – this is up to the CEO. At the same time it is important to be active and ask control questions in order to stay informed, be able to influence and ensure that operations develop as planned."

New work method for Ekonord

During 2010, Ekonord continued to advance its position. Having established its strategies, the company made several investments, and the board's investment committee and the CEO together did much of the ground work concerned.

"The work method will be changed somewhat as from 2011 since our owner companies will become more involved in proposing objects and will play a more active role in the assessment of targeted companies within their respective industries," says Sven-Erik Gustavsson.

But, at the same time, he emphasises that the continuity of the board's work has increased over the two years since it was formed. Something else that has increased is diversity. Initially the board was very much based on long term experience.

"The board is broader now, in terms of both age and background. This, I feel, is very good for the development of Ekonord since it is important to always have a clear future perspective," Sven-Erik Gustavsson concludes.

Source: Sjätte AP-fonden