Ownership policy and steering

State ownership steering complies with the principles of good governance and the Limited Liability Companies Act, according to which the owner, the board of directors and the executive management each have their own duties, responsibilities and rights. The State as a shareholder makes decisions on matters falling within the competence of the General Meeting, whereas the board of directors appointed by the general meeting and the executive management of the company are responsible for the operations of the company.

The State holds interests in 69 major companies. Of these, the State owns shares in 12 companies (Anora Group, Elisa, Kemira, Konecranes, Metso Outotec, Nokia, Nokian Renkaat, Outokumpu, Sampo, Stora Enso, TietoEVRY ja Valmet) through its wholly owned holding company Solidium Oy.

The most important decision-making body of a company is the General Meeting, where the shareholders appoint the members of the board of directors, among other items of business. The State requires companies to present remuneration and corporate sustainability reports at their General Meetings.

In addition to these established forms of contact, the State engages in regular dialogue with company management and, above all, the chair of the board of directors, and responds to the company's situation as necessary.

By appointing public officials to the boards of companies, the State aims to ensure that the boards are aware of the State’s expectations. To ensure that companies operate in line with the State’s strategic interests related to its shareholdings, it is important that a person familiar with these interests is on the board of directors and is involved in the preparation of decisions.

The listed companies in which the State has large shareholdings – Finnair (55.9 per cent), Fortum (51.26 per cent), Neste (44.2 per cent) and SSAB (6.3 per cent) – are companies of strategic interest for Finland. Ownership of these companies safeguards accessibility, infrastructure and energy self-sufficiency and ensures that Finland can meet its climate targets. These companies also play a key role in achieving Finland’s highly ambitious target of being carbon neutral by 2035. As a financially stable long-term owner, the State is able to support companies of strategic interest in the event of crises.

Listed companies have access to the financial markets and thus have the opportunity to expand their financing toolkit. Once a company's shares have been listed, the company will always have market value and access to capital markets. 

Listed companies are also a significant source of dividend income, which is recognised as revenue in the state budget.

All large shareholders, regardless of the specific ownership arrangements, appoint representatives to the boards of directors of the companies they own. The State is the largest shareholder in Finland. One way to exert influence is to nominate competent and experienced public officials to the boards of directors of state-owned companies. Boards of directors are appointed by the General Meeting.

The board of directors makes decisions on the company’s strategy, investments and other important matters. To ensure that a company's activities are in line with strategic interests related to state shareholdings, it is important that a person familiar with state interests is involved in the preparation of these decisions.

The State has had representatives on the boards of its unlisted companies for decades. Now, the State has also recognised the importance of having representatives elected to the boards of listed companies of strategic interest at the General Meeting. Solidium also aims to appoint persons in its inner circle to the boards of companies in its portfolio.

The State has appointed public officials who are familiar with the State’s objectives, principles and ownership strategy to the boards of directors of companies and has ensured that the proposed representatives have the competence and experience required for the task.

A public official on the board of a company can also talk to the chair of the board about the need to discuss an issue with the State as owner. This is done in accordance with the Limited Liability Companies Act and the principles of good governance, which means that discussions with the owner are always conducted by the chair of the board of directors or the executive management of the company.

When public officials serve as members of the boards of companies, they operate in accordance with the Limited Liability Companies Act and are on an equal footing with other members of the board of directors as representatives of all shareholders. Public officials are subject to the same obligations and responsibilities concerning confidentiality and good governance as other members.

As a member of the board of a limited liability company, a public official is personally legally liable to the company and is subject to the same personal obligations and responsibilities as other members. The board membership fee compensates for the members’ workload and ensures equal personal responsibility. Members of the board of directors must compensate for any damage caused by their acting in violation of the due diligence obligation, the Limited Liability Companies Act, the articles of association of the company or any other provision, either intentionally or negligently. The State will not and may not assume such personal financial or other liability on behalf of a member of the board of directors.

Board membership is a representative duty, not an official duty. A board member’s duties include preparing for and attending meetings, but also other tasks, such as separate projects and recruitment. Preparation for board meetings takes place outside of working hours and must not hamper the performance of official ownership steering duties.

Each member of the board represents all shareholders, including members who are public officials.

The members of the board receive a membership fee approved by the general meeting for carrying out their duties as members of the board. The membership fee is paid by the company.

The Ownership Steering Department has separated officials’ board membership duties from ownership steering responsibilities. A person is disqualified from acting in ownership steering matters concerning a company if they are a member of the board of the company in question. This means that the same person cannot serve in both roles for a particular company.

State-owned companies are companies in which the State holds the majority of shares (at least 50.1 %). Associated companies are companies in which the State holds 10–50.1% of the votes. However, a company may be designated as an associated company by a decree issued by the Government, even if the State’s voting rights fall short of 10%.

Ownership steering in respect of companies in which the State holds direct interest is exercised by the Ownership Steering Department in the Prime Minister’s Office, which is also responsible for the preparation and implementation of the state ownership policies. Additionally, the Ownership Steering Department is responsible for shareholder control in respect of Solidium, which oversees the special assignment companies. Ownership steering responsibilities in respect of the other special assignment companies are divided between seven ministries.

According to the present Government Programme, the proceeds from the sale of state assets are primarily to be used for the repayment of central government debt. Up to 25%, but no more than EUR 150 million of any annual revenues exceeding EUR 400 million, may be used for projects designed to strengthen the economy and promote growth.

A total of nine companies in which the State holds a majority interest have supervisory boards. They are  Alko Inc,  Finnish Fund for Industrial Cooperation Ltd; Finnvera plc, Posti Corporation, Kemijoki Oy, Neova Oy, Oy Veikkaus Ab, VR-Group Ltd, and Yleisradio Oy (Finnish Broadcasting Company YLE). 

The State has direct holdings in four listed companies: Finnair Plc, Fortum Corporation, Neste Corporation and SSAB.

Additionally, the State holds interest indirectly through Solidium in 12 associated companies: Anora Group Plc., Elisa Corporation; Kemira Corporation; Konecranes Plc.; Metso Outotec Corporation; Nokia Plc.; Nokia Tyres Plc.;  Outokumpu Plc.; Oyj; Sampo Group Plc.;  Stora Enso Plc.;  TietoEvry Corporation, and Valmet Corporation.

No. As of autumn 2017, the Ownership Steering Department does not publish information on the remuneration policies of state-owned companies. The EU Shareholder Rights Directive and the Government Resolution on Ownership Policy (8 April 2020) further strengthen the obligation of the boards of directors of companies to disclose information on their remuneration practices. Therefore, it is not justified for an individual shareholder to disclose this information separately.

In line with the Government Resolution on Ownership Steering, the state owner expects the boards of directors of companies to describe their company-specific remuneration policies a their general meetings and to justify the managing director’s actualised performance bonus and the performance bonus of the management group as a whole.

It would be against regulation and the principles of good governance if an ordinary member of the board were to comment on the confidential discussions of the board. The board of directors acts on a collegial basis, meaning that only the chair makes public comments on the company's affairs. In addition, listed companies have an obligation under the Securities Markets Act to provide information to all shareholders equally, which limits the ability of board members to disclose company-specific information to only one shareholder. A board member may inform the board of the State's policies, but in a listed company, a board member may not communicate in the opposite direction, i.e. disclose the board’s discussions to anyone, not even to the Ownership Steering Department.