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UPDATE 1-Swedish investment group Industrivarden signals change with first female CEO
August 12, 2015 / 5:28 PM / 2 years ago

UPDATE 1-Swedish investment group Industrivarden signals change with first female CEO

(Adds comment, detail, background)

By Sven Nordenstam

STOCKHOLM, Aug 12 (Reuters) - Swedish investment group Industrivarden picked its first female CEO and one of the youngest in its 71-year history, the latest appointment in a new guard at the top of one of the country's biggest business empires after a corporate spending scandal.

The choice of private equity executive Helena Stjernholm, 45, announced on Wednesday, signals a wish to change the public image of Industrivarden as a stuffy, cumbersome entity that sought to cement influence over some of Sweden's biggest companies in the hands of a few men who had risen through the ranks of Handelsbanken or its other holdings.

"Young. Female. Competent. Can it get any better?" tweeted Albin Rannar at the Swedish association for small shareholders, which has criticized how Industrivarden exerts power over its holdings through cross-shareholdings and cross-board representation within the group.

While Stjernholm brings experience of finding good investments, dealmaking and boardroom work at smaller companies, such as healthcare service provider Attendo, the world of publicly traded large cap firms is new to her.

As CEO of Industrivarden, which has controlling stakes in companies with a combined market value of almost 1,200 billion Swedish crowns ($140 billion), including Ericsson and Volvo, she will most likely join some of those boards later.

"It's a big, big step - sitting there as a young woman with all those old men in all those heavyweight industrial companies," said a person who knows her and described her as very competent, intelligent and with drive.

"It is not easy to see what she can bring to Sandvik, Ericsson and Volvo, but who knows - maybe she will be a breath of fresh air in those contexts."

Industrivarden has owned many of its stakes for decades and maintained board seats, a very different style to the fast-moving world of private equity where companies are usually bought and sold within a few years.

One senior banker who has experience of working with Stjernholm said the appointment was positive for Industrivarden, describing her as thoughtful, knowledgeable and experienced, and said it could herald a new approach to doing business at the company.

SPENDING SCANDAL

The appointment comes after months of turbulence in the Industrivarden group, sparked by a spending scandal at hygiene products maker SCA, including hunting trips with the company jet.

Newspaper Svenska Dagbladet reported that chefs were flown in for lavish dinners at a hunting lodge in northern Sweden, a corporate jet returned empty to Stockholm to pick up a forgotten wallet and hunting dogs were ferried in by helicopters.

The episode led to the departure of Industrivarden's chairman. That prompted the biggest shareholder, Fredrik Lundberg, to take the chair himself, instead of the CEO, and to set about finding replacements for the top tier of executives at the investment firm and some of its holdings.

"She (Stjernholm) is definitely not part of SCA's shooting party, and she doesn't fly private jets - she is very down to earth," the senior banker said.

There were just 14 female CEOs among 266 listed companies in Sweden as of March, according to a report by non-profit group AllBright which promotes equality and diversity in Swedish business.

Fredrik Lundberg said Stjernholm's experience of investments, company boards and acquisitions, not her gender, had been crucial in her appointment.

"She is also a very gifted and hard-working person who is good at social networking," he told Reuters. He declined to comment on the previous management's record or go into the specifics of what he expected of Stjernholm at the group.

Swedish pension funds, long critical of what they saw as Industrivarden's high-handedness in its dealings with companies in which they had stakes, welcomed Lundberg's appointment as chairman in May, seeing it as a departure from the old guard.

Over the past five years, Industrivarden's share price has risen around 90 percent, lagging those of Investor AB , the investment vehicle controlled by Sweden's Wallenberg family, which have gained 150 percent.

A key difference between them is Investor's dual approach of owning stakes in listed companies and including fully or part-owned unlisted companies in its portfolio. ($1 = 8.5811 Swedish crowns) (Editing by Alistair Scrutton and Susan Fenton)

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