Swedish state owned companies Valuable companies create valuable

Swedish state owned companies Valuable companies create valuable jobs Peter Lindell The Government of Japan NÄRINGSDEPARTEMENTET The Global Corporate Governance Forum

Overview u u u u The Government’s Portfolio The State as an Owner – Lessons Learned Lesson 1: Separation of Regulation & Ownership Lesson 2: Transparency Lesson 3: Clear Corporate Governance Structure Lesson 4: Private Sector Discipline NÄRINGSDEPARTEMENTET

The Swedish Government’s portfolio Svenska Kraftnät (National Grid) Akademiska Hus (Real estate) Apoteket (Pharmaceutical retailing) Others 35% listed shares 65% private equity — of which 90% in competitive markets Vasakronan (Real estate) Telia (Telecommunications) Posten (Postal services) Vin&Sprit (Beverages) Total value: $50 billion Svenska Spel (Gambling) Nordea (Banking) Vattenfall (Utility) Note: Estimate as of March 2001 NÄRINGSDEPARTEMENTET Assi. Domän (Forestry) OM Gruppen (Exchange/ Technology) SAS Sverige (Airline)

State-owned companies ($ Bln) NÄRINGSDEPARTEMENTET

Administration Sveriges Riksdag The Government The Board The Ministry of Industry CEO The Division for State-owned companies Management The Government appoints the NÄRINGSDEPARTEMENTET Board The Board appoints the CEO

The Swedish Government’s Ownership Policy =>The Objective is to create value NÄRINGSDEPARTEMENTET

Three Years of Experience => Active Ownership – Lessons Learned NÄRINGSDEPARTEMENTET

Lesson 1: Concentration of Resources & Separation of Regulation and Ownership Earlier Responsibility widely spread Closely related to political issues Conflicts of interest at all levels Active ownership — exit not an option Introducing private sector discipline — maximising shareholder value NÄRINGSDEPARTEMENTET Now Ownership and policy concentrated to Mo. I Independent units with ownership focus

Lesson 2: Transparency Now Then From the Owner ”Black-box” NÄRINGSDEPARTEMENTET Consolidated balance sheet and income statement Quarterly reporting Annual reports From the Companies Swift and consistent reporting Quarterly reporting Annual reports

Lesson 3: Clear Corporate Governance Structure Board Nomination Evaluation NÄRINGSDEPARTEMENTET Nomination Need Boardmeetings Professional Boards Based on company’s strategic position Competitive remuneration Board representation Dialogue ACTIVE OWNER

Cutting edge Corporate Governance Guidelines Rules of Procedure for the Boards Guidelines for Incentive Programs Guidelines for Renumeration and Terms of Employment Guidelines for External Financial Reporting NÄRINGSDEPARTEMENTET

Lesson 4: Introduce Private Sector Discipline & Focus on Core Business NÄRINGSDEPARTEMENTET

NÄRINGSDEPARTEMENTET

www. naring. regeringen. se/inenglish/areas_of/st ate_owned NÄRINGSDEPARTEMENTET