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Demokratiskolan
The State-owned companies card from MethodKit for Society and Politics
Card 102 of 128 · MethodKit for Society & Politics
  • AreaThe state & public administration
  • Centre of gravityCentral government
  • Points of influence2 on the journey
  • Decisive electionThe general election
The state & public administration

State-owned companies

Companies owned or controlled by the state

You meet them more often than you think: the train is SJ, the electricity may come from Vattenfall, the wine is bought at Systembolaget and the parcel is delivered by PostNord. The state owns some forty companies, from mines to gambling. Here the market does not rule alone but, ultimately, the Riksdag and the Government, and so, in the end, the voters.

Where does the power lie?1

  • State · owns, governs & appoints boards · approx 85 %
  • EU · state aid & competition · approx 15 %

The power lies with the Government, which manages the ownership, with the Riksdag as the ultimate owner. The EU's competition rules set the limits.

How it works: the breakdown

The municipalityIts own companies
The regionThe transport companies
Central governmentThe owner · centre of gravity
Who decides?
No role in the state's companies. Instead the municipal council (kommunfullmäktige) owns companies of its own.
No role in the state's companies. Regions own companies for, among other things, public transport.
The Riksdag is the ultimate owner. The Government Offices (Regeringskansliet) manage the companies and appoint the boards.
What do they decide?
Municipal housing companies, energy companies and ports are governed by ownership directives from the council.
Transport companies and certain service companies, governed by the regional council's ownership directives.
Some forty companies: energy, mines, trains, post and gambling. Buying and selling companies often requires a Riksdag decision.
Where are decisions made?
In the council and at the general meeting. Municipal companies are covered by the principle of public access to official documents (offentlighetsprincipen).
In the regional council and on the companies' boards.
At the general meetings and in the Government's annual report to the Riksdag.
Who pays?
The companies usually pay their own way through rents and fees, with the municipality as owner.
Ticket revenue, fees and regional tax.
The companies finance themselves and often pay a dividend to the state treasury.
Fastest way in?
Municipal election The municipal election governs the ownership directives for the housing and energy companies.
Regional election The regional election governs the transport companies' ownership directives and mandate.
General election The general election decides what the state should own and why.
EUThe EU's state aid and competition rules govern what publicly owned companies may do, for example that they may not be favoured over private ones. Shaped in the European Parliament election.

Read the table by column to understand one level, or by row to compare the levels. The green level is the area's centre of gravity.

How it works: follow the decision

The case How the state governs a company
  1. State

    The Riksdag gives the mandate

    The Riksdag decides that the state should own, and why. Some companies have a special public mission: Systembolaget's monopoly exists for public health, not for profit.

    Point of influence

    The general election is the way in. Larger purchases and sales of state companies are decided by the Riksdag.

  2. State

    The Government manages the ownership

    The Government Offices handle the ongoing ownership according to an ownership policy with requirements on, among other things, sustainability and financial targets. The boards are appointed at the general meeting.

  3. State

    The board runs the company at arm's length

    The Government governs through the general meeting, targets and board appointments, not in the daily running. The CEO and the board make the business decisions.

  4. EU

    The EU watches over competition

    The state aid rules forbid state companies from being favoured at competitors' expense, and a monopoly must be justifiable. Systembolaget's exclusive right has been tested against EU law and stands on public health grounds.

  5. State

    The scrutineers read the accounts

    The Government submits an annual report on the companies to the Riksdag, and the Swedish National Audit Office can examine how the ownership is handled.

    Point of influence

    The reports and the National Audit Office's reports are public. The Committee on the Constitution can examine how ministers have handled the ownership governance.

  6. Your everyday life

    The train, the electricity and the Saturday queue

    The train you take, the electricity in the wall and the queue at Systembolaget on a Saturday: all of them are the result of political decisions about what the state should own and why.

The journey looks the same in reverse: what has been built came the same way, through the same decisions. Whoever knows where the decisions are made also knows where they can be changed.

Questions to discuss

  1. Which state-owned companies do you meet in an ordinary week without thinking about it?

  2. What should the state own: only what the market cannot handle, or more than that?

  3. When profit targets and a public mission collide in a state company, what should weigh heaviest?

  4. The state sells both gambling and alcohol and at the same time wants to reduce the harm. How does that fit together, in your view?

  5. If you could sell one state company and keep one, which would they be and why?

Glossary

Bolagsstämma
The owner's formal meeting with the company, where the state, among other things, appoints the board.
Ägarpolicy
The Government's rule book for how the state companies are to be governed and followed up.
Samhällsuppdrag
A special mission alongside the business, such as Systembolaget's public health mission.
Statsstöd
Public favouring of individual companies, tightly regulated by the EU.
Ägardirektiv
The owner's instruction to a publicly owned company, in municipalities decided by the council.

Go further

Footnotes

1) This is an estimate of how decision-making power over the issue is split between the municipality, the region, central government and the EU, based on how responsibility is divided in legislation. A teaching guide, not an exact measurement.