Ownership policy and steering
The state ownership policy and ownership steering in practice is governed by legislation, the decisions of the Finnish Government and good corporate governance.
The Ownership Steering Department in the Prime Minister’s Office is responsible for the preparation and practical implementation of the State’s ownership policy and the control exercised in respect of the companies concerned.
The objectives of the State’s ownership policy are, among other things, pursued through the ownership steering exercised by the State in respect of the companies in which it holds interests. The main elements of ownership steering include transparent and consistent shareholder action; the nomination of responsible and competent individuals for board membership; contributions to the corporate management resources and encouragement to induce a lasting commitment to the company on the part of the management; and due consideration of the interests of all shareholders as well as other stakeholders. The main tools available to shareholders consist of an independent preparation of an ownership strategy and the promotion of sound corporate governance practices.
The key principles and practices governing state ownership steering are outlined in the .Government resolution on ownership policy. Responsibility for the preparations relating to state ownership steering rests with the Government Ownership Steering Department in the Prime Minister’s Office, which is also responsible for the consistency and exercise of shareholder control by the State on a practical level.
The State of Finland holds interests in over fifty key companies. About two-thirds are companies in which the State owns the majority of shares or associated companies in which it is a minority shareholder. The other state-owned companies are ‘special assignment companies’ which are given a specific state-defined mission or enjoy some special exemption for which reason they do not operate in a regular competitive environment.
With regard to companies operating on market terms, the State’s aim is to achieve maximum overall financial performance. The attainment of this objective is evaluated in terms of profitability and the long-term increase in shareholder value.
Similarly, the goal for special assignment companies is that the operations show a profit. With regard to these companies, the State’s objectives, as an owner, are defined with a view to the best possible overall social and financial outcome, which is primarily assessed in terms of how effectively and at what cost the company is able to achieve its specific social function.
To attain these key objectives, the State pursues an active and pragmatic ownership policy. Using the regular tools and means available to owners, the State seeks to develop the companies and contribute to the long-term increase in shareholder value.
The State is committed to pursuing a transparent ownership policy geared to produce consistent and predictable results. The premises for the State’s ownership policy are outlined in the Government Programme.
The primary objectives and instruments of ownership policy and steering are defined in Government resolutions, the statements issued by the Cabinet Committee on Economic Policy and the recommendations given by the ministry responsible for the field of activity involved. All these policy documents are public and available to all market actors.
The Ownership Steering Department in the Prime Minister’s Office is responsible for the preparation and practical implementation of the ownership policy lines adopted by the State.