Law, Culture and Sustainability: Corporate Governance in the Nordic Countries
In Beate Sjåfjell and Christopher M. Bruner (eds), Cambridge Handbook of Corporate Law, Corporate Governance and Sustainability (Cambridge University Press, 2019), Chapter 16.
Posted: 8 May 2019 Last revised: 15 Jun 2020
Date Written: May 6, 2019
Nordic countries have their own variations of the same corporate law theme, based on equality between shareholders and minority protection. However, U.S.-style shareholder primacy has influenced corporate practices, legal literature and governance codes. The strength of the ‘Nordic model’ is not in law or in codes, but in a typically Nordic form of ‘active ownership’ by non-institutional direct shareholders such as families, foundations and public pension funds. It is not, however, enough and requires broader participation for sustainability. The answer might be in corporate board activity. The Nordic ‘soft’ shareholder activism, based on a dialogue between the investors and the board, gives room for the boards to convince the investors of the advantages of long-term sustainability. Recurring Nordic bank crises show that bankers’ motives for profit maximisation should be particularly constrained.
Keywords: active shareholding, board activity, bank crises, public ownership
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