The instability has raised questions about Swedish corporate governance, often seen as a model compared with other countries. Its practice of giving investors such as Industrivarden and the Wallenberg family’s Investor group a large say in how companies are overseen has been praised for promoting stability and a long-term focus. In some ways, the events indicate that Sweden’s system is working as intended. Although the reasons for the ejection of Michael Wolf, Swedbank’s former chief executive, are not wholly clear, a loss of investor confidence produced rapid changes. Swedbank’s nomination committee decided in March not to reappoint Anders Sundstrom as chairman. Sweden’s investors wield control over the composition of boards through nomination committees. Shareholders sit on these committees with the right to approve – or to dispose of – directors each year. In countries such as the US and UK, nominations are made by directors themselves and shareholders have limited rights to influence their choice. No system of corporate governance is perfect, however, and Sweden’s places a lot of responsibility in the hands of a few institutions. The pitfalls of this were shown in the case of Industrivarden, which along with Investor, controls more than half the value of the Swedish stock exchange. (FT)
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