Corporate Governance in Modern Financial Capitalism
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Corporate Governance in Modern Financial Capitalism

Old Mutual’s Hostile Takeover of Skandia

Markus Kallifatides, Sophie Nachemson-Ekwall and Sven-Erik Sjöstrand

This insightful book focuses upon corporate governance processes, and explores the conditions required for effective corporate governance and control in 21st century globalized and financialized economies. In presenting a comprehensive study of a cross-border hostile corporate take-over process, describing the actors, institutions and events involved, this book examines and questions the current forms of corporate governance and control – both from a national and a global perspective. Using Old Mutual’s takeover of Skandia as a case study, the authors address corporate governance theory, and highlight its two fundamental dimensions: financial and operational flows.
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Chapter 4: Skandia Life UK

Markus Kallifatides, Sophie Nachemson-Ekwall and Sven-Erik Sjöstrand

Extract

4. 4.1 Skandia Life UK A STRAINED RELATIONSHIP In the early twenty-first century British managers in Skandia Life UK were not – and had never been – particularly impressed with the activities carried out at the Swedish parent company. Above all, they frowned at what they saw as a growing focus on the US operations in American Skandia that, in their eyes, had a weak business model. Back in the 1980s and 1990s, the UK management had spent energy on keeping the Swedish management, that is, their owner, at some distance. This attitude was not taken out of the blue. The UK life insurance market differed from that of the rest of Europe. It was seen as more sophisticated, mature and competitive; thus the Skandia Life UK actors ran their own business. This was also Skandia’s largest subsidiary. In 2003 Skandia Life UK (with its HQ in Southampton) and Royal Skandia1 (with an office on the Isle of Man) employed a total of 2200 persons. The US business had at its height 1400 employees. During the same period Skandia Sweden had 1700 employees split between the mutual Skandia Liv, its unit-linked business, and Skandiabanken (its Internet bank). Few people in Skandia Life UK talked about the Swedish parent company and its HQ. There were employees in UK who did not even know that the company had a Swedish mother company until the bonus scandal reached the UK press in 2003. Among those who did know about the Swedish business, some thought the...

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