1. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Empowering Boards in State Owned Enterprises Elisabet Johansson Ministry of Industry, Employment and Communications Sweden

2. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Overview Ownership Administration Framework Board member – structure Rules of Procedure for the Boards Board Composition Board nomination – four steps Success factors Conclusions

3. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Ownership Administration Sector policy separated from ownership issues Professional boards and managements Value creation Companies operating under market conditions are to operate under the same conditions and have the same demands made on their activities as other players Some state-owned companies are primarily intended to fulfil special societal interests and…

4. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Professional Boards ”with the necessary authority, competencies and objectivity to carry out their function of strategic guidance and monitoring management”

5. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Framework – Board composition Swedish Companies Act OECD guidelines Swedish Code for Corporate Governance Ownership policy SOE’s

6. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Swedish SOEs - Board member structure Total number approx. 400 appointed by AGM 140 employee representatives (64 deputies) 7-9 members and 2+2 employee representatives 42 per cent women Recommended Rules of Procedure in the Board

7. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Rules of Procedure for the Boards Division of responsibility Information Board meetings Evaluation Board committees

8. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Board composition – principles The Chairman – has a key function – independent from civil service – separated from the CEO Members of the Board –relevant competence to fulfill the strategy of the company –independent from the management –the person responsible at the Ministry is on the Board Employee representation –following the same law as private companies

9. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Board nomination - process in four steps Annual evaluation of the Board Identification of competence required Search and interviews Appointment and disclosure

10. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Success factors Board nominations is the most important tool in combination with transparence and clear financial goals Structured process Evaluation and dialogue with the chairman Competence - key factor Responsibility – no interference from the owner in day to day business Reasonable remuneration The board members have to be comfortable with state ownership

11. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s Conclusions Good profitability Openness to restructurings Devoted board members including employee representatives

12. M i n i s t r y o f I n d u s t r y, E m p l o y m e n t a n d C o m m u n i c a t i o n s More information: www.regeringen.se