Our question in January: Ownership control should be strengthened - not weakened

Written by MATS KOCKBERG, Interpersona’s Managing Director

The discussion about selecting board members for listed companies continues. A suggestion has been made in Sweden that the chairman of the board in a listed company – especially in the finance sector – should not represent any of the major shareholders, i.e. should be “independent”. The objective is to prevent situations where the board favors certain shareholders at the expense of others, as well as of customers. The belief is that this would improve governance. 

The suggestion does not appear to be well thought through. The difficulties many listed companies have faced are not caused by too strong or unbalanced corporate governance, but rather the result of the inability of shareholders to exercise their ownership through the board in an appropriate manner. If proper corporate governance had been in place, excessive risks and loss of capital could have been prevented. It is obvious that shareholders do not want the capital to disappear as a result of bad management by the board or the operative management.

It is in the common interest of all to improve corporate governance in listed companies. This is achieved through strengthened – not weakened – ownership control.