Corporate Governance – An Owner Perspective A study of owners’ efforts and action spaces in large companies by Sven-Erik Sjöstrand.
It covers all ownership categories — not only those based on individuals, families, dynasties, and clans, but also investment companies, PE companies, activist companies, SPACs, partnerships, employee-owned companies, and state-owned companies, as well as mutual, corporate, cooperative, foundation-based, and pension fund ownerships. The Nordic ownership and governance practices are compared with those of five other European countries (France, Germany, Italy, the Netherlands, and the United Kingdom), occasionally drawing on cases related to other countries (especially the United States).
After turning the lens to focus on the role of institutions — how laws, regulations, codes, and customs function in the governance processes, the author describes which arenas, channels, and tools of governance are used. He argues that three factors play particularly important roles in framing the owners’ governance efforts: [i] the ownership category, [ii] the ownership structure (dispersed vs concentrated ownership), and [iii] the personalities and commitment of the dominating owners.
Finally, the author describes strengths and weaknesses of the Nordic corporate governance regime. He argues that it is characterized by an almost unique clarity regarding how power should be – and is – distributed within a company: the (large) owners decide. Moreover, as regulations only delineate the main lines of power, owners have great freedom when it comes to designing their companies’ governance processes. Such ‘sparse’ legislation creates ‘gaps’ that soft regulations and custom many times tend to capture/fill. So, the Nordic setting makes room for tailor-made solutions, which usually enhance the efficiency of each owner’s governance efforts. A weakness, however, is that the strong position of the (large) owners poses a risk unless the owning families/dynasties – or society as a whole –succeed in (re)producing new generations of committed, competent, and respected owners.
