January 30, 2023
Terhi Koipijärvi: Strategic thinking over administration
What is most important in Board work? How to draw the line between operational and strategic thinking? How to avoid getting bogged down in administration? What is it like to serve on the Board of the largest forestry company in East Africa?
“Thank you for your faith in me, what an intriguing company!”, replied I when Ilkka Norjamäki from Finnfund asked me whether I would be interested in joining the Board of Green Resources, a company operating in Tanzania, Uganda and Mozambique.
I am a forester by training and have made a long global career in forest companies and Metsähallitus, the Finnish forest administration, until switching to consultancy last autumn. So I had seen the industry in Finland and around the world, but working in Africa would be a first.
The company was in an interesting phase of growth and transformation: it was the largest forest company in East Africa and had recently been transferred to the principal ownership of the development financiers that had previously been its lenders, Finnfund and Norfund from Finland and Norway, respectively. The company was now going through a phase of strong growth and development. This development extended to the company’s entire business: forestry, wood processing and the carbon trade, along with sustainability and impact.
I would be looking at this last category in particular, which suited me fine: corporate responsibility must be a genuinely strategic instrument developed by all parts of the organisation. So I said an enthusiastic yes and put myself to the task.
Aiming for “best in class”
What are my thoughts now, after about two years on the job? The traditional view of developing countries is that we, the people from the rich countries, bring them our tried and true know-how and solutions that work in the environment we are familiar with. However, we would do well to remember that there are no “one size fits all” solutions and developing countries have a lot of knowledge and understanding that cannot be imported: local knowledge, skilled workers and stakeholders.
I personally think that, at the Board level, it is terribly important to look at things from the perspective of the business environment and stakeholders too – to bring thinking, feedback and ideas in from the outside. In Africa, too, the goal must be to be “best in class”, a forerunner in the industry and emerging markets.
This also means forgetting the “when in Rome” mentality. You need to understand conditions on the ground, but international standards create a basis for credible and viable business.
Forget about “when in Rome”
When development financiers and impact investors get involved, they look for sustainability above all. And when you are aiming for sustainability, you need to measure it by the best international practices. Personally, I think that a fair and responsible market is in everyone’s best interests. There should be no double standards.
For Green Resources, for example, this means doing sensible business and cultivating well-being in the surrounding community at the same time. The whole business is built on this idea. For example, the company holds an international FSC certificate for responsible forest management, has ISO quality and environmental management systems in place, follows the GRI in sustainability reporting, while its responsibility programme and impact assessments use the UN’s Sustainable Development Goals as a baseline.
Leave administration to the administrators!
How to draw the line between the operational and the strategic? An enthusiastic Board member can all to easily get mired in operations. But you need to maintain a practical touch and distance yourself from the day-to-day administration. This has been particularly important for me when chairing the ESG Committee.
It is a question of maintaining a balance: a Board member is supposed to spur the operational management on. They are out there in the trenches, after all. They should decide together what needs fixing, prioritise and draw up a roadmap for implementation. The actual implementation and solutions should be left to the operational management.
At Green Resources, the creation of a sustainability programme was an important milestone. The company had already done a lot: for example, FSC certification brought external audits, and Finnfund and Norfund brought a lot of sustainability expertise in with them. The new programme aims to align the sustainability work carried out in different parts of the company into a more coherent system and set goals and a timetable for the development of sustainability. For example, the company aims to protect biodiversity even more decisively, increase the transparency and sustainability of its supply chains, increase the social impact generated by employment and its business as a whole, and make its products friendlier to the climate and environment. At the same time, we have developed the company’s business and improved profitability.
We turned a new page in the company’s history at the end of 2022, when its shareholders accepted an offer for their shares. The company’s new owner will be the African Forestry Impact Platform (AFIP), which focuses on the African forestry sector. The investment company’s goal is to raise a total of 500 million USD over the next 2–3 years in support of sustainable forestry that mitigates climate change.
Sustainable forestry creates local vitality
In the end, the positive effects of forestry are much the same no matter if you are in Finland or in a small village in Mozambique. Sustainable and responsible forestry provides both vitality and natural value to its surroundings. This means things like jobs, buying from local suppliers and better infrastructure, such as roads and transport connections.
The difference is that the natural forests of many East African countries have been cut down years ago. Forest cultivation increases biomass, which also acts as a carbon sink – in addition, the protected areas required for international forest certification strengthen biodiversity and provide a home for local animal and plant species.
A plunge into development finance
It is important to have the courage to ask questions. With a new company, it always takes a while to get the memo, so to speak. On the other hand, even though you are constantly learning new things professionally, you cannot take your job as just a learning experience. For me, it has been really important to be able to combine my previous work experience with what I have learned about the emerging markets.
At the same time, you need to keep up to speed with global developments. The field of sustainability is changing rapidly, and you need to be able to link that to the company’s whole success story and profitability. That puts change on a sustainable footing.
I have professional experience in both business management and sustainability. But the world of development finance was uncharted territory for me. Learning from my colleagues and working with great professionals has been a fantastic experience. What has it given me in practice? In-depth expertise in impact investment and emerging markets, as well as field experience of forestry in Africa. I am glad I answered yes: taking the leap and joining the Board of an East African forestry company certainly paid off.
Terhi Koipijärvi has served on the Board of Directors of the Green Resources forest company and as Chair of the ESG Committee focusing on the company’s responsibility since 2021. She has over 30 years of global experience in corporate responsibility, forestry and the forest industry, for example at Metsähallitus, Stora Enso and Metsä Group. She currently works as a senior advisor at Miltton Group. She is also Chair of the Board of FiBS ry and a member of the Board of Directors of Metso Outotec.