State-owned companies embroiled in multiple controversies
What are Finnish state-owned companies allowed to do and what are they not allowed to do? This has been the topic of a more intense debate this year than ever before.
The government-owned corporations have published sweeping reorganisation and streasmlining plans, they have been revealed as having paid exorbitant retirement allowances and bonuses to their directors, and they have even been shown most recently to be important election campaign financiers.
Even if the state was a minority shareholder in a stock exchange listed company, at least the trade union movement would expect fewer dismissals and lay-offs and also otherwise “more responsible” behaviour from such a firm.
Minister of Defence Jyri Häkämies (National Coalition Party), who is in charge of the state steering of such companies, has nevertheless outlined that even as a state-owner the government cannot demand from companies engaged in international competition that they abstain from adaptation measures.
Particularly vehemently Häkämies has defended the forestry giant Stora Enso’s company restructuring measures that are set to continue in the near future. Through its investment company Solidium the Finnish government owns a 12-per-cent stake in Stora Enso.
The government has a strong authority, however, in firms where its stake is 100% or at least in excess of 50 per cent. There are thirty or so such companies. On the other hand, even the state ownership is not a guarantee against dismissals.
The Finnish government owns 50.1 per cent of Neste Oil, which recently announced that it would reduce its number of workers.
Häkämies's answer to the trade union movement’s accusations has been that the decisions pertaining to business activities belong to the company’s administration, not to the state-owner.
As far as the rewards of the directors, the government has already voiced its displeasure in no uncertain terms, and new regulations regarding the payouts are expected during the course of the autumn.
The state-owner has also intervened with the election funding practices. Häkämies and Prime Minister Matti Vanhanen (Centre) emphasised last week that companies with the state as a majority stakeholder must not engage in such activities.
Previously in HS International Edition:
Big parties downplay impact of possible ban on donations by state-owned companies (12.8.2009)
Häkämies urges state-owned enterprises to disclose donations to parties (10.8.2009)
Ownership Steering - Finnish Government