Add professional board members to the municipal corporations

By: Thomas Ström 10/9/18

The directors should not be certain of their positions until their pension


Public limited companies and boards need more professional business representatives.
And by this, I primarily mean within the board work.
Today, these corporate boards consist solely of confidence-elected municipal politicians, who very rarely have any experience of running a commercial company and everything that that entails.

Gothenburg is without comparison the one municipality in Sweden which has the most municipal companies. On the municipality's website there is an organisational list with over 40 different limited companies. The corresponding number in Stockholm is 20.

In these boards, there are no professional members from the business sector, except in exceptional cases when the municipal politician is also a trader. However, it is in the capacity of an elected official they have ended up in a municipal company board.

It is also these boards that, together with the Bureau of the Municipal Board, appoint and dismiss the highest officials, such as the CEOs of the municipal companies.

When such a board appoints a CEO with long experience from the business sector, it means that they are hiring a person who has much more experience from running companies than themselves.

Some questions that arise at this point are: How can this inexperienced company board make demands on its CEO and how should they know when it is time to dismiss the director in question?

The answer is that they can and do not know when it’s time. If you succeed in becoming a CEO of a municipal company, you will remain there until your pension. Provided that you are in line with the law and you yourself do not want to move on from the position, of course.

I think this is wrong. I believe that all corporate executives, with the directors at the forefront, should be challenged on a regular basis.

Therefore, it is extremely important that more professional business representatives are present in the municipalities' boards.

Currently, several municipal companies are examples of sheltered workshops, which occasionally are saved by municipal tax assets. Just look at Got Event AB, who runs Ullevi and Scandinavium. Last year, the company was responsible for the European Championship in equestrian sport, which was planned to give a plus to the cashier but instead became a financial failure. The bill for the city of Gothenburg and its taxpayers was at least 50 million SEK. Furthermore, Got Event loses around 150 to 200 MSEK each year, but receives group contributions from Göteborg Energi, among other companies, in order to continue its business.