The Wallenbergs: Where Money Meets Swedish Science.

Article by Richard Milne.

The Wallenbergs where money meets Swedish science

Danish Industrial Foundations – Book Review

by Spencer Burke, Principal and Director of the St. Louis Trust Company.


Until now, there has not been any significant aademic study of this form of corporate ownership. How does the financial performance of companies owned this way compare to their peers? What are the regulatory and tax pre-requisites for this to work? Do foundation owned companies have an unfair tax or competitive advantage? If this is such a good thing, why is this alternative not available in the U.S.?

The answer to all these questions and many more are the subject of Professor Steen Thomsen´s fascinating new book, The Danish Industrial Foundations. Professor Thomsen is an expert in corporate governance and is the founding chairman of the Center of Corporate Governance at Copenhagen Business School. The Center has undertaken a comprehensive study of the industrial foundation form of ownership in Europe and, as a starting point, has taken an in-depth look at the Danish experience. This book contains the findings of that research.

The results are stunning.

You can find the full book review here: Book Reveiw–Steen Danish Industrial Founations

or you can read it in an article form here.

Spencer Burke  is a Principal and Director of the St. Louis Trust Company, a multi-family office and trust company, located in St. Louis, Missouri, and an Adjunct Lecturer in Family Business at the Olin School of Business at Washington University in St. Louis. His Family Business course curriculum at Olin is focused on the role of strategic ownership and governance practices on the long-term sustainability of family businesses.  The St. Louis Trust Company provides strategic wealth management advice and services to its client families, many of whom own or control substantial family businesses.

Industrial Foundations in the Danish Economy

Af professor Steen Thomsen, February 19, 2013, Center for Corporate Governance, Copenhagen Business School.


Industrial Foundations (foundations that own business companies) are found around the world e.g in Northern Europe, Germany, the US and India, but nowhere do they appear to be as economically important as in Denmark. In this paper we review their share of the Danish economy. We find that foundation-owned companies account for 5-10% of the Danish economy depending on measurement. However, they constitute the bulk of Danish stock market capitalization and R&D expenditure, and they also contribute disproportionally to international business activity. Finally the industrial foundations make charitable donations of approximately 0.5% of Danish GDP, primarily to research.

Paper: Industrial Foundations in the Danish Economy

What Do We Know (and Not Know) about Industrial Foundations?

By professor Steen Thomsen, August 8, 2012, Center for Corporate Governance, Copenhagen Business School.


Industrial Foundations are foundations which own business companies. They are quite common in Northern Europe, but also occasionally found in other parts of the world. Several well-known companies like the Tata Group, Robert Bosch, Hershey, the Guardian, Aldi or Maersk are owned in this way. Because of their combination of non- profit and for-profit characteristics foundation-owned companies pose interesting questions to current theories of the firm. Can non-profit ownership be economically efficient? Can they derive competitive advantages from their ownership structure? How are foundation-owned companies governed? Such questions are interesting given the economic importance in Northern Europe, but they may also carry more general lessons for corporate governance. This paper surveys the sparse literature and poses questions for future research.

Artikel: What Do We Know about Industrial Foundations?

Governance of Industrial Foundations

Professor Hansmann and Professor Thomsen presented a paper on foundation governance at the conference on corporate governance after the financial crisis at the University of Oxford (co-arranged with the University of Columbia), January 13-14, 2012.


Industrial foundations are nonprofit foundations that own business companies. These entities are not uncommon in Northern Europe and many successful international companies are owned in thus way. Because of their good performance and unusual combination of nonprofit and for-profit entities, they present interesting challenges to theories of the firm. In this paper, we present the first study of the manner in which the foundations govern the companies that they own. We work with a rich data set comprising 121 foundation-owned Danish companies over the period 2003-2008,

We focus in particular on a composite structural factor that we term “managerial distance.” We interpret this as a measure of the clarity and objectivity with which a foundation-owned company’s top managers are induced to focus on the company’s profitability. More particularly, managerial distance seems best interpreted as a factor, or aggregate of component factors, that put the foundation board in the position of “virtual owners,” in the sense that the information and decisions facing the managers are framed for them in roughly the way they would be framed for profit-seeking outside owners of the company. Our empirical analysis shows a positive, significant, and robust association between managerial distance and company economic performance. The findings appear to illuminate not just foundation governance, but corporate governance more generally.

Paper: Virtual Ownership and Managerial Distance: The Governance of Industrial Foundations 

 Trust Ownership of the Tata Group

Copenhagen Business School, 22 December, 2011.


The Indian Tata Group is one of the largest and most admired business groups in the world. It has 28 listed subsidiaries and more than 80 operating businesses. It has shown strong financial performance and social responsibility for decades. Interestingly, it has a unique ownership structure: the main holding company Tata Sons Limited is majority-owned by charitable trusts. We examine the governance of this remarkable entity. The Trusts own 66% of Tata Sons, the main holding company of the Group, while members of the founding Tata family are very small minority shareholders. The governance structure is characterized by managerial distance between trusts and Group companies. The Trusts are almost exclusively concerned with philanthropy, and according to the Articles of Association of Tata Sons Limited, their governance role is limited to nominating two members to the Selection Committee which recommends the Chairman of the company’s Board of Directors. Group companies are independently managed, but there are significant cross shareholdings and a member of the founding family, Mr Ratan Tata, chairs the Trusts, holding companies and major subsidiaries. Mr. Cyrus P Mistry, Managing Director of the Shapoorji Pallonji Group, a minority shareholder in Tata Sons, is to succeed Mr. Ratan Tata as chairman of Tata Sons in 2012. Trustees in the major Trusts are paid nominal fees of as little as $10 and $20 a year.

Paper: Trust Ownership of the Tata Group

A model for healthier profits

Financial Times, 5 December, 2011 10:56 pm

Article: A model for healthier profits