Business History Seminar - "State ownership in Finland"

Pasi Nevalainen (Aalto University, Visiting Research Scholar at BI in May/June): "The people behind faceless ownership: A study of people elected to the boards of state-owned companies in Finland from the 1930s to the present"

State-owned companies balance between business and politics. They are required to make a profit like ordinary companies, but at the same time follow political guidance. However, the relationship between these conflicting goals is not constant. Business history research has already drawn attention to the fact that the meaning of state ownership changes in time and place. The discussion of recent years has shown that the state-owned company model has changed radically in Western countries since the 1970s. Instead, corporate governance has received less attention.

In this paper, I examine the long-term development of ownership control of Finnish state-owned companies from the 1930s to 2020. In a historical study, I examine which people with what backgrounds have been appointed to the boards of state-owned companies in Finland from the 1930s to the present day. It is assumed that these choices inform not only the goals of the ownership, but also the principles of ownership steering.

The most central empirical finding is related to the replacement of politicians by business professionals on company boards from the late 1980s. This indicates not only the changing goals of ownership, but also the professionalization of corporate governance system. Although the empirical findings concern Finland, it can be assumed that similar phenomena can also be found in other developed western countries, where state ownership in companies is common. The research also challenges traditional theoretical assumptions related to state ownership.