SlideShare a Scribd company logo
1 of 16
Conference on ‘Governance and Board Effectiveness in Public
            Sector Enterprises’ April11, 2012
State Ownership Steering- The Finland
            Case Study

                     By:

           Olli V. Virtanen
           Virtanen Associates Oy




              Virtanen Associates Oy
Background in Finland
 After the WW2 state involved in heavy industries
    Forest 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 1980s
   Government 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 Directors
 Abolishment of Supervisory Boards
 Strengthening of the balance sheet
 Stock market listings (SOEs)
    No wholesale privatisations
    Gradual expansion of ownership base
 International capital markets
    Last restrictions on foreign ownership abolished in -93



                       Virtanen Associates Oy
Structure of state ownership steering
    126               PARLIAMENT                      74
                                     OPPOSITION



       GOVERNMENT


     PRIME                                          MINISTRY OF
     MINISTER’S                                     DEVELOPMENT   MINISTRIES
     OFFICE                                         AID


                        MINISTER IN CHARGE
     OWNERSHIP
     STEERING DEPT.




                           Virtanen Associates Oy
CATEGORIES OF STATE HOLDINGS

                     Strategic interest
    Investor

  interest
               Companies with   Companies with
                Strategic   Special
               importance assignment
                          s
STRATEGIC INTREST

     INVESTOR INTEREST               Companies with strategic            Companies with special assignments
                                     importance


        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                                Arctia Shipping Ltd)            Alko Inc                                      STM
Arek Oy                                  Boreal Plant Breeding Ltd       Arsenal Oyj                                   VM
Art and Design City Helsinki Oy          Ekokem Oy Ab                    Certia Oy                                     OKM
Destia Ltd                               Fingrid Oyj                     CSC-IT Center for Science Ltd                 OKM
Edita Plc                                Finnair Plc                     Finavia Corporation                           LVM
FCG Finnish Consulting Group Oy          Finnish Seed Potato Centre      Finnpilot Pilotage Ltd                        LVM
Helsinki Business and Science Park Ltd   Ltd                             Finnvera Plc                                  TEM
Kemijoki Oy                              Fortum Corporation              Governia Oy                                   VNK
Mint of Finland Ltd                      Gasum Corporation               Hansel Ltd                                    VM
Opetusalan koulutuskeskus Educode Oy     Itella Corporation              HAUS Institute of Public Management Ltd       VM
Raskone Oy                               Municipality Finance Plc 1)     Horse Institute Ltd                           OKM
(11)                                     Meritaito Ltd                   Solidium Oy                                   VNK
                                         Motiva Oy                       Suomen Erillisverkot Oy, State Security       VNK
                                         Neste Oil Corporation           Networks Ltd
                                         Patria Holding Oyj              Finnish Aviation Academy Ltd                  OKM
                                         Suomen Lauttaliikenne Oy        Finnish Industry Investment Ltd               TEM
                                         Suomen Viljava Oy               Tietokarhu Oy                                 VM
                                         Vapo Oy                         Finnish Fund for Industrial Cooperation Ltd   UM
                                         VR-Group Ltd                    (FINNFUND)
                                         (18)                            Veikkaus, Finnish Lottery for Finns           OKM
                                                                         Yleisradio - Finnish Broadcasting Company     LVM
                                                                         Yrityspankki Skop Oyj
                                                                         (20)                                          VM
Key principles of state ownership steering
    No separate state ownership code
    Principles of ownership in Government Resolution
    Separation of regulatory and ownership functions
    In listed companies no state priviligies
    Commercial companies run on commercial basis
      Efficiency and profitability
      State support measures equal to all
  In all companies professional non-executive board
     members
      No 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

               CS                                  CHAIR
               1
Chinese wall
               CS    APPOINTED                CS
                                              2
               2     MEMBER
  OWNERSHIP                                        SOE
  STEERING                                         BOARD
  DEPARTMENT




                     Virtanen Associates Oy
Premises and decision making
Source: 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 learned
 Pragmatism
 Take your time
 Motivate population (voters)
 Focus on governance
 Define categories for different interests
 Find best people
 Remember national interests




                      Virtanen Associates Oy
Steps forward
 Step One
    Owners will = Political will
    Categorisation
    Professionalism  roles and responsibilities
    Legal framework
    Code
 Step two
    Competence, training
    Evaluation
    Driver’s licence


                       Virtanen Associates Oy
Olli V. Virtanen
      Virtanen Associates Oy
         Hiidenkuja 6 B 4
           02750 Espoo
              Finland

          Tel. +358-500-600462
olli.virtanen@virtanenassociates.com
     www.virtanenassociates.com

           Virtanen Associates Oy
Thank you




 Virtanen Associates Oy

More Related Content

More from Hammad Siddiqui

1 alligning mission with membership and activities
1 alligning mission with membership and activities1 alligning mission with membership and activities
1 alligning mission with membership and activities
Hammad Siddiqui
 
Membership surverys aasia
Membership surverys aasiaMembership surverys aasia
Membership surverys aasia
Hammad Siddiqui
 
Policyadvocacyregionalprojectkathmandu
PolicyadvocacyregionalprojectkathmanduPolicyadvocacyregionalprojectkathmandu
Policyadvocacyregionalprojectkathmandu
Hammad Siddiqui
 
Successful Career Presentation
Successful Career PresentationSuccessful Career Presentation
Successful Career Presentation
Hammad Siddiqui
 

More from Hammad Siddiqui (20)

Secretary Generals Conf 2017
Secretary Generals Conf 2017Secretary Generals Conf 2017
Secretary Generals Conf 2017
 
The Art of Public Speaking
The Art of Public SpeakingThe Art of Public Speaking
The Art of Public Speaking
 
Workshop for 2nd tier leaders
Workshop for 2nd tier leaders Workshop for 2nd tier leaders
Workshop for 2nd tier leaders
 
Capacity building workshop for 2nd tier management upload
Capacity building workshop for 2nd tier management uploadCapacity building workshop for 2nd tier management upload
Capacity building workshop for 2nd tier management upload
 
Empowering board and effective committees
Empowering board and effective committeesEmpowering board and effective committees
Empowering board and effective committees
 
Lahore membership development
Lahore membership developmentLahore membership development
Lahore membership development
 
A Book on Career Guidance for Everyone
A Book on Career Guidance for Everyone A Book on Career Guidance for Everyone
A Book on Career Guidance for Everyone
 
Social Media for Marketing and Branding
Social Media for Marketing and BrandingSocial Media for Marketing and Branding
Social Media for Marketing and Branding
 
Trade Organization Act 2013
Trade Organization Act 2013Trade Organization Act 2013
Trade Organization Act 2013
 
Financial Management for Business Associations
Financial Management for Business AssociationsFinancial Management for Business Associations
Financial Management for Business Associations
 
CEO Capacity Building Workshop 2013 for Business Assocaitions
CEO Capacity Building Workshop 2013 for Business AssocaitionsCEO Capacity Building Workshop 2013 for Business Assocaitions
CEO Capacity Building Workshop 2013 for Business Assocaitions
 
1 alligning mission with membership and activities
1 alligning mission with membership and activities1 alligning mission with membership and activities
1 alligning mission with membership and activities
 
Wcci pehawar
Wcci pehawarWcci pehawar
Wcci pehawar
 
Membership surverys aasia
Membership surverys aasiaMembership surverys aasia
Membership surverys aasia
 
Policyadvocacyregionalprojectkathmandu
PolicyadvocacyregionalprojectkathmanduPolicyadvocacyregionalprojectkathmandu
Policyadvocacyregionalprojectkathmandu
 
Successful Career Presentation
Successful Career PresentationSuccessful Career Presentation
Successful Career Presentation
 
20 Shocking Interview Questions
20 Shocking Interview Questions20 Shocking Interview Questions
20 Shocking Interview Questions
 
How to Define Success
How to Define SuccessHow to Define Success
How to Define Success
 
Chamber Management Program
Chamber Management ProgramChamber Management Program
Chamber Management Program
 
What is Policy Advocacy
What is Policy AdvocacyWhat is Policy Advocacy
What is Policy Advocacy
 

Recently uploaded

Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
lizamodels9
 
FULL ENJOY Call Girls In Majnu Ka Tilla, Delhi Contact Us 8377877756
FULL ENJOY Call Girls In Majnu Ka Tilla, Delhi Contact Us 8377877756FULL ENJOY Call Girls In Majnu Ka Tilla, Delhi Contact Us 8377877756
FULL ENJOY Call Girls In Majnu Ka Tilla, Delhi Contact Us 8377877756
dollysharma2066
 
Call Girls Navi Mumbai Just Call 9907093804 Top Class Call Girl Service Avail...
Call Girls Navi Mumbai Just Call 9907093804 Top Class Call Girl Service Avail...Call Girls Navi Mumbai Just Call 9907093804 Top Class Call Girl Service Avail...
Call Girls Navi Mumbai Just Call 9907093804 Top Class Call Girl Service Avail...
Dipal Arora
 
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
amitlee9823
 
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
amitlee9823
 

Recently uploaded (20)

Mysore Call Girls 8617370543 WhatsApp Number 24x7 Best Services
Mysore Call Girls 8617370543 WhatsApp Number 24x7 Best ServicesMysore Call Girls 8617370543 WhatsApp Number 24x7 Best Services
Mysore Call Girls 8617370543 WhatsApp Number 24x7 Best Services
 
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdfDr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
 
The Coffee Bean & Tea Leaf(CBTL), Business strategy case study
The Coffee Bean & Tea Leaf(CBTL), Business strategy case studyThe Coffee Bean & Tea Leaf(CBTL), Business strategy case study
The Coffee Bean & Tea Leaf(CBTL), Business strategy case study
 
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
Call Girls In DLf Gurgaon ➥99902@11544 ( Best price)100% Genuine Escort In 24...
 
FULL ENJOY Call Girls In Majnu Ka Tilla, Delhi Contact Us 8377877756
FULL ENJOY Call Girls In Majnu Ka Tilla, Delhi Contact Us 8377877756FULL ENJOY Call Girls In Majnu Ka Tilla, Delhi Contact Us 8377877756
FULL ENJOY Call Girls In Majnu Ka Tilla, Delhi Contact Us 8377877756
 
Call Girls In Panjim North Goa 9971646499 Genuine Service
Call Girls In Panjim North Goa 9971646499 Genuine ServiceCall Girls In Panjim North Goa 9971646499 Genuine Service
Call Girls In Panjim North Goa 9971646499 Genuine Service
 
KYC-Verified Accounts: Helping Companies Handle Challenging Regulatory Enviro...
KYC-Verified Accounts: Helping Companies Handle Challenging Regulatory Enviro...KYC-Verified Accounts: Helping Companies Handle Challenging Regulatory Enviro...
KYC-Verified Accounts: Helping Companies Handle Challenging Regulatory Enviro...
 
VVVIP Call Girls In Greater Kailash ➡️ Delhi ➡️ 9999965857 🚀 No Advance 24HRS...
VVVIP Call Girls In Greater Kailash ➡️ Delhi ➡️ 9999965857 🚀 No Advance 24HRS...VVVIP Call Girls In Greater Kailash ➡️ Delhi ➡️ 9999965857 🚀 No Advance 24HRS...
VVVIP Call Girls In Greater Kailash ➡️ Delhi ➡️ 9999965857 🚀 No Advance 24HRS...
 
M.C Lodges -- Guest House in Jhang.
M.C Lodges --  Guest House in Jhang.M.C Lodges --  Guest House in Jhang.
M.C Lodges -- Guest House in Jhang.
 
It will be International Nurses' Day on 12 May
It will be International Nurses' Day on 12 MayIt will be International Nurses' Day on 12 May
It will be International Nurses' Day on 12 May
 
Regression analysis: Simple Linear Regression Multiple Linear Regression
Regression analysis:  Simple Linear Regression Multiple Linear RegressionRegression analysis:  Simple Linear Regression Multiple Linear Regression
Regression analysis: Simple Linear Regression Multiple Linear Regression
 
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...
Lucknow 💋 Escorts in Lucknow - 450+ Call Girl Cash Payment 8923113531 Neha Th...
 
Ensure the security of your HCL environment by applying the Zero Trust princi...
Ensure the security of your HCL environment by applying the Zero Trust princi...Ensure the security of your HCL environment by applying the Zero Trust princi...
Ensure the security of your HCL environment by applying the Zero Trust princi...
 
Value Proposition canvas- Customer needs and pains
Value Proposition canvas- Customer needs and painsValue Proposition canvas- Customer needs and pains
Value Proposition canvas- Customer needs and pains
 
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...
👉Chandigarh Call Girls 👉9878799926👉Just Call👉Chandigarh Call Girl In Chandiga...
 
Call Girls Navi Mumbai Just Call 9907093804 Top Class Call Girl Service Avail...
Call Girls Navi Mumbai Just Call 9907093804 Top Class Call Girl Service Avail...Call Girls Navi Mumbai Just Call 9907093804 Top Class Call Girl Service Avail...
Call Girls Navi Mumbai Just Call 9907093804 Top Class Call Girl Service Avail...
 
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
Call Girls Jp Nagar Just Call 👗 7737669865 👗 Top Class Call Girl Service Bang...
 
B.COM Unit – 4 ( CORPORATE SOCIAL RESPONSIBILITY ( CSR ).pptx
B.COM Unit – 4 ( CORPORATE SOCIAL RESPONSIBILITY ( CSR ).pptxB.COM Unit – 4 ( CORPORATE SOCIAL RESPONSIBILITY ( CSR ).pptx
B.COM Unit – 4 ( CORPORATE SOCIAL RESPONSIBILITY ( CSR ).pptx
 
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
Call Girls Electronic City Just Call 👗 7737669865 👗 Top Class Call Girl Servi...
 
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League CityHow to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
 

Public Sector Governance by Mr Olli

  • 1. Conference on ‘Governance and Board Effectiveness in Public Sector Enterprises’ April11, 2012
  • 2. State Ownership Steering- The Finland Case Study By: Olli V. Virtanen Virtanen Associates Oy Virtanen Associates Oy
  • 3.
  • 4. Background in Finland  After the WW2 state involved in heavy industries  Forest 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 1980s  Government statement on profitability in 1982  Concern over balance sheet and governance Virtanen Associates Oy
  • 5. Development phase (late 80s, early 90s)  Politicians recognised and approved development  Clean-up on Board of Directors  Abolishment of Supervisory Boards  Strengthening of the balance sheet  Stock market listings (SOEs)  No wholesale privatisations  Gradual expansion of ownership base  International capital markets  Last restrictions on foreign ownership abolished in -93 Virtanen Associates Oy
  • 6. Structure of state ownership steering 126 PARLIAMENT 74 OPPOSITION GOVERNMENT PRIME MINISTRY OF MINISTER’S DEVELOPMENT MINISTRIES OFFICE AID MINISTER IN CHARGE OWNERSHIP STEERING DEPT. Virtanen Associates Oy
  • 7. CATEGORIES OF STATE HOLDINGS Strategic interest Investor interest Companies with Companies with Strategic Special importance assignment s
  • 8. STRATEGIC INTREST INVESTOR INTEREST Companies with strategic Companies with special assignments importance 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 Arctia Shipping Ltd) Alko Inc STM Arek Oy Boreal Plant Breeding Ltd Arsenal Oyj VM Art and Design City Helsinki Oy Ekokem Oy Ab Certia Oy OKM Destia Ltd Fingrid Oyj CSC-IT Center for Science Ltd OKM Edita Plc Finnair Plc Finavia Corporation LVM FCG Finnish Consulting Group Oy Finnish Seed Potato Centre Finnpilot Pilotage Ltd LVM Helsinki Business and Science Park Ltd Ltd Finnvera Plc TEM Kemijoki Oy Fortum Corporation Governia Oy VNK Mint of Finland Ltd Gasum Corporation Hansel Ltd VM Opetusalan koulutuskeskus Educode Oy Itella Corporation HAUS Institute of Public Management Ltd VM Raskone Oy Municipality Finance Plc 1) Horse Institute Ltd OKM (11) Meritaito Ltd Solidium Oy VNK Motiva Oy Suomen Erillisverkot Oy, State Security VNK Neste Oil Corporation Networks Ltd Patria Holding Oyj Finnish Aviation Academy Ltd OKM Suomen Lauttaliikenne Oy Finnish Industry Investment Ltd TEM Suomen Viljava Oy Tietokarhu Oy VM Vapo Oy Finnish Fund for Industrial Cooperation Ltd UM VR-Group Ltd (FINNFUND) (18) Veikkaus, Finnish Lottery for Finns OKM Yleisradio - Finnish Broadcasting Company LVM Yrityspankki Skop Oyj (20) VM
  • 9. Key principles of state ownership steering  No separate state ownership code  Principles of ownership in Government Resolution  Separation of regulatory and ownership functions  In listed companies no state priviligies  Commercial companies run on commercial basis  Efficiency and profitability  State support measures equal to all  In all companies professional non-executive board members  No politicians, maximum one civil servant  Candidate Bank Virtanen Associates Oy
  • 10. 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
  • 11. State role in SOEs OWNERSHIP STEERING CS CHAIR 1 Chinese wall CS APPOINTED CS 2 2 MEMBER OWNERSHIP SOE STEERING BOARD DEPARTMENT Virtanen Associates Oy
  • 12. Premises and decision making Source: 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
  • 13. Lessons learned  Pragmatism  Take your time  Motivate population (voters)  Focus on governance  Define categories for different interests  Find best people  Remember national interests Virtanen Associates Oy
  • 14. Steps forward  Step One  Owners will = Political will  Categorisation  Professionalism roles and responsibilities  Legal framework  Code  Step two  Competence, training  Evaluation  Driver’s licence Virtanen Associates Oy
  • 15. Olli V. Virtanen Virtanen Associates Oy Hiidenkuja 6 B 4 02750 Espoo Finland Tel. +358-500-600462 olli.virtanen@virtanenassociates.com www.virtanenassociates.com Virtanen Associates Oy
  • 16. Thank you Virtanen Associates Oy