First Stop: Helsinki

Observing Finnish culture firsthand was truly something special, especially during this unique time where it seemed like entire country was celebrating such an exciting win for ice hockey. The people were kind, the food was fantastic, and the city was rarely dark, with the sun setting well into the nights.

The Nordic Economic Model

In comparing the similarities and differences between corporate governance models, it is important to have a firm understanding of the Nordic Economic Model in order to set the standard each company must comply with. The Nordic economies are competitive, high-income countries characterised by high employment rates, especially for women. There is a high degree of equality, high taxes and high public spending on welfare. Extensive social nets are funded by taxpayers, including major sectors such as free education and free healthcare, thereby contributing to their well-educated populations. They have well-organised labour markets, strong property rights, contract enforced and overall ease of doing business. Finally, their solid government financing allows state interventions to stabilise economic development.


The first company we visited was Nordea, the largest bank in the Nordic. They focus on low-risk investments and have used it to build a massive company with 29,300 employees. According to their website, their core values as a company are collaboration, ownership, passion and courage. They encourage a feedback environment to promote the spread of new ideas and collaboration. Their website states that they “believe in taking the time to pause, connect and reflect both as individuals, teams and as an organization, on how we contribute, how we grow and how we enjoy.” Dr. Jukka Vesala, Director of Credit Risk Control at Nordea gave us a brief overview of the economic model their company follows and some company-wide policies. For example, he mentioned that Nordea follows a 3-years maternity leave policy. They have a well-maintained system of equal opportunity employment with 52% of their employees being women. Within that, 40% of leaders at Nordea are women. Dr. Vesala also mentioned that their company is beginning to consider climate change and social concerns for their future risk and investments. All of this information is consistent with Finnish work culture and tendencies that we have discussed in class, such as focusing increasing efforts on sustainability/environmental conscientiousness and prioritizing a healthy balance with family life.

Aalto University

Our second stop in Finland was at the Aalto University School of Business, the number 1 research university in Finland. It has a student population of 3000 students and 100 faculty members. An extremely unique feature to the Nordic economic model is that all education, including undergraduate, graduate and PhD studies, are free. Because of this, all Nordic companies expect students to pursue at least a master’s degree. Additionally, Nordic students are said to be the “most satisfied students” because of their high quality of education. The university works hard to create an open culture, where the university is not a “business” and students are not “customers.” They encourage equality by having their students call their professors by their first names and a more friendly relationship than we have in our system in America. This is consistent with tendencies of Finnish working culture as well, where first names are used regardless of status and communication is informal. As our speaker explained, respect is shown more through acts of friendship, such as listening, sharing a meal together, and things of that nature.

This informality was also visible with our fourth visit, which was also with Aalto University, specifically their entrepreneurship group. These students were highly motivated and carried themselves quite professionally, however they were dressed in jeans and company t-shirts, regardless of their status.

In the society as a whole, academics in Finland are highly regarded and respected, with teachers making approximately the same amount of money as a doctor. The Aalto professors emphasized that different contexts produce different knowledge and different ways of thinking. Therefore, they are satisfied with their model and view it as significantly better than the American education system.


The third company we visited was Valio, which is the largest dairy business in Finland, employees over 30,000 people. The company is a major player in the international dairy ingredients market, and despite the fact that their products are found in approximately 60 countries, they are still seeking further growth in international markets. The company is responsible for 25% of Finland’s total food exports, and they pride themselves in being a forerunner when it comes to sustainability.

Valio values community and togetherness. They work hard to ensure they work with consumers to have a positive impact in society. “Together, we make life better” is one of their core values. Another major cultural value is that they are not profit driven, and they work to purposely give their farmers as much profit as they can. This idea of utility maximization is highlighted in Angkinand and Wihlborg’s text, as it is in stark contrast with the Anglo-Saxon tendency to be driven by profit. They promote animal welfare and sustainable milk production and a circular economy. Additionally, they emphasize transparent procurement and for their employees, they encourage innovation and promoting health and well-being. They also care about their customers, through a nutrition agreement that promises their products are making it easier to eat less sugar and salt. Lastly, they have a sector called Valio Akatemia that supports active lifestyles for children and youth. Since 2013, they have given out over 1,500 stipends.

The company is run by both a Board of Directors and a Supervisory Board, and overall ownership is rather concentrated, with 16 dairy cooperatives comprising the ownership in total. This is also consistent with Angkinand and Wihlborg’s literature, which highlights the major distinctions between Anglo-Saxon/Market-Based Models and Relationship-Based or Insider-Oriented Models, and states that ownership structures of the latter tend to remain concentrated where the Anglo-Saxon tendency is to have “widely dispersed ownership.” It also states that executive and supervisory responsibilities tend to remain separate in European models, which Valio adheres to, as opposed to a one-tier board, which is what Americans would expect to use.

Additional References:

Angkinand, A.P., & Wihlborg, C. (2011). Chapter 12 – The New Financial Architecture: The Role of Market Discipline for Governance.