Alecta Chief Urges Positive Reforms As Corporate Governance Overhaul Looms

The body has already said that the proposed revised code was not expected to involve any major changes, apart from on remuneration issues.

In an article on Alecta’s website, Billing emphasised the importance of companies having a healthy organisational culture, citing management consultant Peter Drucker: “Culture eats strategy for breakfast.”

“In these times of regular corporate scandals both in the Nordic countries and globally, the quote feels more relevant than ever,” Billing said. He cited emissions testing and money laundering scandals, which have affected major European companies including Volkswagen and Swedbank and “destroyed enormous shareholder values”.

“A prerequisite for restoring the demolished values is first and foremost the restoration of confidence in the organisation and its ability to create long-term sustainable values,” the CEO said. “There are not enough clear goals and well-designed strategies and business plans for this to happen.”

“In order to be successful in the longer term, a company must build and maintain good relationships with a large number of stakeholders”

Magnus Billing

Billing cited the revision last year of the UK corporate governance code, which included an emphasis on corporate culture as a key part of the governance of a company.

The FRC’s reasoning was based on the idea that companies operated in a larger social context, and had to relate to this in order to create long-term sustainable shareholder value.

“In order to be successful in the longer term, the company’s board of directors and its management must build and maintain good relationships with a large number of stakeholders, such as customers, authorities, employees, owners and others,” said Billing.