Report: Finland lacks long-term ownership
The withdrawal of banks from ownership roles has created a power vacuum in listed companies in Finland. In addition to limited risk capital, the Finnish business sector suffers from the lack of active anchor ownership with an eye on long-term development. The problem could be alleviated by strengthening the position of managerial control and that of the owners who are actively involved in corporations. The involvement of Private Equity in business development should also be encouraged.
These are among the main conclusions put forward in the report commissioned by the Economic Council from Adjunct Professor Ulf Jakobsson and Professor Timo Korkeamäki. The report examines business ownership and ownership steering in Finland from the viewpoint of large firms.
The report, which was drawn up in Finnish-Swedish cooperation, focuses on key issues as regards foreign and institutional ownership and the effects of ownership structures on business investments and reforms. The decline in anchor ownership can be explained by the fact that share classes with different voting rights have become less popular while institutional ownership based on shareholder interest has become more popular. Domestic and foreign pension funds are an example of this trend.
According to the report, the Finnish investment climate should be improved in the eyes of both Finnish and foreign investors. The Finnish stock market should be made more attractive to both businesses and investors. This can be facilitated by, for example, tax and pension systems. By international standards, the share of State and cooperative form of ownership is exceptionally high in Finland and should be gradually reduced to safeguard the economy's ability to reform in an increasingly dynamic operating environment.
The report Governance of large Finnish firms is available in Finnish and English.
Inquiries: Adjunct Professor Ulf Jakobsson, Research Institute of Industrial Economics, tel. +46705644617, [email protected], Professor Timo Korkeamäki, Hanken School of Economics, tel. +358 40 352 1308 and Pekka Sinko, General Secretary of Economic Council, Prime Minister’s Office, tel. +358 295 160 189