16
Conference on ‘Governance and Board Effectiveness in Public Sector Enterprises’ April11, 2012
| Date post: | 13-Jan-2015 |
| Category: |
Business |
| Upload: | hammad-siddiqui |
| View: | 599 times |
| Download: | 0 times |
Conference on ‘Governance and Board Effectiveness in Public Sector Enterprises’ April11, 2012
Virtanen Associates Oy
State Ownership Steering- The Finland Case Study
By:
Olli V. VirtanenVirtanen Associates Oy
Virtanen Associates Oy
Background in FinlandAfter the WW2 state involved in heavy
industriesForest industry, metal and engineering, mining,
fertilisers, tele…SOEs accounted for about 20% of GDP (now
5-7%)Companies poorly run, heavily in debt, state
budget financed, and helped with periodical devaluations
Wake-up in the 1980sGovernment statement on profitability in 1982
Concern over balance sheet and governance
Virtanen Associates Oy
Development phase (late 80s, early 90s)
Politicians recognised and approved development
Clean-up on Board of DirectorsAbolishment of Supervisory BoardsStrengthening of the balance sheetStock market listings (SOEs)
No wholesale privatisationsGradual expansion of ownership base
International capital marketsLast restrictions on foreign ownership
abolished in -93
Virtanen Associates Oy
Structure of state ownership steering
PARLIAMENTOPPOSITION
MINISTRIESMINISTRY OF DEVELOPMENT AID
PRIME MINISTER’SOFFICE
OWNERSHIP STEERING DEPT.
GOVERNMENT
MINISTER IN CHARGE
126 74
Investor interest
Strategic interest
Companies with
Strategic importance
Companies with
Specialassignments
CATEGORIES OF STATE HOLDINGS
INVESTOR INTEREST
STRATEGIC INTREST Companies with strategic importance
Companies with special assignments
COMPANIES OPERATING ON MARKET TERMS SPECIAL ASSIGNMENT COMPANIES
1. OWNERSHIP STEERING UNDER THE PRIME MINISTER’S OFFICE 2. OWNERSHIP STEERING UNDER SEVERAL
MINISTRIES Group 1 a Group 1 b Group 2 Altia Oyj Arek Oy Art and Design City Helsinki Oy Destia Ltd Edita Plc FCG Finnish Consulting Group Oy Helsinki Business and Science Park Ltd Kemijoki Oy Mint of Finland Ltd Opetusalan koulutuskeskus Educode Oy Raskone Oy (11)
Arctia Shipping Ltd) Boreal Plant Breeding Ltd Ekokem Oy Ab Fingrid Oyj Finnair Plc Finnish Seed Potato Centre Ltd Fortum Corporation Gasum Corporation Itella Corporation Municipality Finance Plc 1) Meritaito Ltd Motiva Oy Neste Oil Corporation Patria Holding Oyj Suomen Lauttaliikenne Oy Suomen Viljava Oy Vapo Oy VR-Group Ltd (18)
Alko Inc Arsenal Oyj Certia Oy CSC-IT Center for Science Ltd Finavia Corporation Finnpilot Pilotage Ltd Finnvera Plc Governia Oy Hansel Ltd HAUS Institute of Public Management Ltd Horse Institute Ltd Solidium Oy Suomen Erillisverkot Oy, State Security Networks Ltd Finnish Aviation Academy Ltd Finnish Industry Investment Ltd Tietokarhu Oy Finnish Fund for Industrial Cooperation Ltd (FINNFUND) Veikkaus, Finnish Lottery for Finns Yleisradio - Finnish Broadcasting Company Yrityspankki Skop Oyj (20)
STM VM OKM OKM LVM LVM TEM VNK VM VM OKM VNK VNK OKM TEM VM UM OKM LVM VM
Virtanen Associates Oy
Key principles of state ownership steering
No separate state ownership codePrinciples of ownership in Government ResolutionSeparation of regulatory and ownership functionsIn listed companies no state priviligiesCommercial companies run on commercial basis
Efficiency and profitabilityState support measures equal to all
In all companies professional non-executive board membersNo politicians, maximum one civil servant
Candidate Bank
Virtanen Associates Oy
Responsibilities of the Ownership Dept.Source: Ownership Department
Located in the Prime Minister's Office, but not under the Prime Minister
Directly accountable to the Minister responsible for Ownership Steering
Ownership strategy, analyses and monitoring, legal matters and communications
Independent organisation enables sufficient ability to react and exercise criticism
Virtanen Associates Oy
State role in SOEs
OWNERSHIP STEERING
OWNERSHIPSTEERINGDEPARTMENT
SOEBOARD
CS1
CS2
CS2
APPOINTEDMEMBER
CHAIR
Chinese wall
Virtanen Associates Oy
Premises and decision makingSource: Ownership department
Essential legislation, corporate governance, government resolution and statement by the Cabinet Committee
Parliament sets shareholding limits, allocates budget resources and approves incorporation arrangements
Decisions on sales and acquisitions and on the overall governing principles are made in government plenary sessions
The Minister responsible for Ownership Steering exercises the right of action and is accountable to the Government and Parliament
Companies operating on market terms are under the Ownership Steering Department in the Prime Minister's Office
Virtanen Associates Oy
Lessons learnedPragmatismTake your timeMotivate population (voters)Focus on governanceDefine categories for different interestsFind best peopleRemember national interests
Virtanen Associates Oy
Steps forwardStep One
Owners will = Political willCategorisationProfessionalism \ roles and responsibilitiesLegal frameworkCode
Step twoCompetence, trainingEvaluationDriver’s licence
Virtanen Associates Oy
Olli V. VirtanenVirtanen Associates Oy
Hiidenkuja 6 B 402750 Espoo
Finland
Tel. [email protected]
www.virtanenassociates.com
Virtanen Associates Oy
Thank you
