Major reshuffle at Confederation of Finnish Industries

There has been a dramatic reshuffle at the Confederation of Finnish Industries (EK) following criticism of the Director General’s leadership. EK, the leading business organisation in Finland, appointed a new Chair at the end of 2012, and he immediately sacked the Director General and replaced other board members. The turmoil dates back to the framework agreement concluded in autumn 2011 which created a polarisation of opinion and caused divisions among EK’s membership.

Key figures ousted

The end of 2012 was marked by turmoil and a major boardroom reshuffle at the Confederation of Finnish Industries (EK). The board of EK appointed Ilpo Kokkila, owner of construction group SRV, as its new Chair of the Board. His first move was to replace the organisation’s Director General, lawyer and entrepreneur Mikko Pukkinen.

Pukkinen, who had been in the job since September 2010, was one of three influential directors who left the EK boardroom. Pukkinen’s replacement as Director General was the Finnish Government’s Minister of Economic Affairs, Jyri Häkämies.

Häkämies has been member of the Finnish Parliament since 1999. He was Minister of Defence and the Minister handling state ownership steering issues between 2007 and 2011. Häkämies has been Minister of Economic Affairs since June 2011.

Also ousted was key framework agreement negotiator Jukka Ahtela. The Deputy Director-General was reassigned to a temporary project. It was a similar story for another Director, Timo Kekkonen, who had been in charge of EK’s innovation policy. Meanwhile EK Director Lasse Laatunen was appointed the organisation’s new Labour Market Director.

In an interview with the magazine Suomen Kuvalehti, Pukkinen said his dismissal had come as a total surprise.

Background to the dismissal of the DG

Former Director General Pukkinen had been criticised by some companies and EK-affiliated employer associations. Particularly unhappy with his leadership were employer associations representing export industries, who disliked his management style. They claimed Pukkinen had hidden and withheld important information during negotiations with social partners over the adoption of framework agreements in 2011.

But complaints about Pukkinen’s management style do not appear to have been the main grounds for his dismissal. The real background to the reshuffle seems to have been the discontent among EK-affiliated employer associations, mainly due to the framework agreement concluded in autumn 2011 (FI1111011I).

The decision to return to centralised national agreements in autumn 2011 had been a bitter disappointment to some influential EK-affiliated employer associations, especially as in 2008 EK declared that wages should be negotiated at a sectoral and company level, and not at a national level (FI0806029I).

Commentary

The recent polarisation of EK-affiliated associations has meant the creation of two opposing employer camps. On one side are the employer associations representing the service sector, and on the other associations representing export industries. The new leadership is likely to ensure that the export associations representing technology, metalworking, chemistry and the forest industry have more influence than employer associations from the service sector.

Companies and affiliated organisations in the export sector had become frustrated in recent years that other sectors were defining the Finnish wage norm. They believe that in future Finnish pay rises should be determined on the basis of the competitiveness of the export sector.

Pertti Jokivuori, University of Jyväskylä