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Reforming Swedish Government-Owned Companies

Reforming Swedish Government-Owned Companies. Richard Woodworth +44 20 7867 2621 richard_woodworth@ml.com 19 September 2000. Points to Cover. 1. Background to Policy Change 2. Assess Government’s Objectives 2. Assess Progress to Date 3. Is the Swedish Experience Applicable?.

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Reforming Swedish Government-Owned Companies

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  1. Reforming Swedish Government-Owned Companies Richard Woodworth +44 20 7867 2621 richard_woodworth@ml.com19 September 2000

  2. Points to Cover 1. Background to Policy Change 2. Assess Government’s Objectives 2. Assess Progress to Date 3. Is the Swedish Experience Applicable?

  3. Background to GOC Policy Change • Early 1990s Economic, Financial Problems • EU Accession • Globalization • Information, Communications Technology • OECD Privatization • EMU and Industry Consolidation • Knowledge Economy

  4. Swedish Government Objectives • Transparency • Value Creation • Accountability • Flexibility

  5. Means to Achieving Objectives • Transparency • Corporate Governance • Capital Structure • Incentives • Internet

  6. Greater Transparency • Regular Quarterly, Annual Reports • Increased Public Scrutiny, Expectations

  7. More Focused Corporate Governance • Set Guidelines for Directors • Hire More Outside Directors • Increase Accountability

  8. Leaner Capital Structure • Realize True Economic Cost of Capital • Pay Dividends • Borrow on Private Capital Market

  9. Worker Incentives • Offered to All Employees • Determined Company by Company • Manager Has Broad Discretion

  10. Internet Strategy • Reduce Costs of Sales, Customer Support • Purchase On-line • Control Inventories • Forecast Consumer Demand

  11. Assessing the Progress to Date • Government Portfolio Large and Diverse • Experience So Far Limited • Scorecard: • Transparency A • Corporate Governance [B] • Capital Structure ? • Incentives ? • Internet Strategy ?

  12. Is the Swedish Experience Applicable? • Sweden on Established Reform Path • Strong Institutions • Tradition of Openness • Considerable ‘New Economy’ Potential

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