Björn Wahlroos may be the most important business executive in Finland. Chairman of three of the biggest companies in the Nordic region – Nordea, the bank, Sampo, the financial services group, and UPM-Kymmene, the paper producer

September 22, 2013 5:15 pm

Finland’s former revolutionary

By Richard Milne


Not-so-cuddly: Björn Wahlroos’s nickname of Nalle, a term similar to teddy bear in English, belies his reputation

Björn Wahlroos may be the most important business executive in Finland. Chairman of three of the biggest companies in the Nordic region – Nordea, the bank, Sampo, the financial services group, and UPM-Kymmene, the paper producer – the dapper 60-year-old is renowned in his homeland almost as much for his sharp tongue as for his business prowess. Widely known as Nalle – similar to teddy bear in English – his life has followed an extraordinary trajectory. “I think it’s a great story” he says.Describing himself as a “high-school communist”, Mr Wahlroos is now Finland’s arch-capitalist. “I’d laugh myself crazy if my kids would come with some sort of leftist idea. ‘I don’t think you can be that bloody stupid’,” he says.

Mr Wahlroos is speaking at his country estate, which is also home to 11,000 old books, just outside the south-western town of Salo. The 5,000-acre estate dates back to the 14th century and the manor house was built in 1790 by Count Gustaf Mauritz Armfelt, the viceroy of Finland under Tsar Alexander I.

“You have to remember this is the chap who is doing second year in college; he’s 20 years old,” he says, describing his teenage brush with the politics of the far left. “He’s had a fascinating four years with revolution . . . And all of a sudden [my friends and I] realised that everybody around us was turning Stalinist.

“The world got pretty nasty in 1972/73. The contours became much sharper and as [they did] of course all of a sudden you realise you may be standing on the wrong side of the contour.”

Mr Wahlroos, who comes from the Swedish-speaking minority in Finland, began his working life as a professor. After completing an undergraduate degree, a masters and then a doctorate in economics, he began teaching at Brown University and Kellogg School of Management in the US. Not for the first time in his career,
his timing was almost perfect – working as a professor of microeconomics at a time in which there was a
“big conflict between markets and planning that became the big thing in the late 70s”.

He says proudly that in teaching evaluations at Kellogg he outscored Phil Kotler, the well-known professor of marketing. “That’s the one thing I always like to remind myself of,” Mr Wahlroos says.

He credits his father’s interest in books and academic study as one of the factors that inspired him to go into the world of letters. He is quick to add, however, that while academia “was fascinating”, it was “also a way of avoiding, postponing a decision”.

The CV

Born:1952 in Helsinki
Education: 1974-79 Bachelors, masters and doctorate in economics, Swedish School of Economics, Helsinki
Career: 1979-85 Professor of economics, Hanken Swedish School of Economics; visiting professor at Brown University and Kellogg School of Management at Northwestern University
1985 Management board, Union Bank of Finland
1992 Takes investment bank private as Mandatum
2000 Chief executive, Sampo
2009- Chairman, Sampo;
Chairman of Nordea, Sampo, UPM-Kymmene
Hobbies: Reading; shooting

But then came a “kind of Mario Puzo thing . . . an offer which you couldn’t refuse” and an abrupt career shift. The chairman of Union Bank of Finland offered him a junior board seat. “That’s luck again,” Mr Wahlroos says. “I got into banking in 1985 when we are deregulating all the financial markets and as a consequence, of course, I had a marvellous time.”

While the most recent global financial crisis has been widely blamed on deregulation, he is unapologetic about its effects. Indeed, he says “it was way too late . . . The earlier you do it and the more skilfully you do it the smaller are the side-effects. We [in the Nordics] had a lot of side-effects but so did everybody else.”

Soon the Nordic region had been plunged into a deep financial crisis with Finland, Norway and Sweden all having banking shocks. But 20 years later, says Mr Wahlroos, it was interesting to see those three countries avoid a banking crisis. Denmark, which missed the 1990s variant, suffered this time round. “There’s a very strong learning curve argument there . . . The financial crisis in the early 1990s taught Swedish, Finnish and Norwegian bankers, central bankers and politicians a whole lot, and quite obviously that message was not quite as strongly received in Denmark,” he says in comments made before the chief executive of Danske Bank was removed last week.

But Finland’s position today is far from healthy, with Nokia and the paper industry, its two industrial heavyweights, struggling.

“They’re actually very closely related,” Mr Wahlroos says, “because the iPad hit Nokia and the iPad hit the pulp and paper industry. So we have a big job ahead of us. We’ve started on that journey but I don’t see enough sense of urgency.”

The day after the Microsoft deal to buy Nokia’s handset business was announced, he described it as a “necessary and well-executed transaction”.

Finland is just emerging from its second recession since the financial crisis and has been a poster child for austerity in the eurozone. Some, particularly outside the country, have wondered if it should abandon debt reduction and embrace higher government spending. Should the country move towards Keynesian stimulus policies?

“I think that argument is nonsense; it’s been nonsense ever since 1936. Actually, believe it or not, I reread [Keynes’] General Theory just about three months ago and I suggest everybody do it because it’s an incredibly bad book,” says Mr Wahlroos, hastily pointing out he means badly argued, not badly written.

Perhaps it should not be surprising. As a former academic, he peppers his conversation with historical allusions. He points to James Callaghan, the UK prime minister who told a conference of his Labour party in 1976 that the idea that government spending was a way out of a recession was no longer feasible. Mr Wahlroos argues that it is “absurd” to think you can spend your way out of a crisis.

Later, while discussing financial regulation, he throws in a reference to the battle of Culloden in 1746, when, he says, “the Pope reinforced the ban on charging interest”.

Almost apologetically, he concludes: “This is very theoretical but I used to be a professor in this. I’m sorry about the enthusiasm.”

Talk eventually returns to his career. In 1992, at the height of the Nordic crisis, he took the investment bank of UBF private and turned Mandatum, the new company, into the region’s leading mergers and acquisition adviser.

In 2001, he merged Mandatum with Sampo, becoming both chief executive and a big owner in the latter. Mr Wahlroos says “in terms of management style [this was] the biggest challenge”.

His predecessor had created a matrix organisation – “in order not to fire anyone. So I came in and within two months I had fired, well, at least half of the executives.”

Does that not make it odd that he is known as Nalle? “My nickname is Nalle, which means teddy bear” in both Swedish and Finnish, he says. But with a glint in his eye, he adds: “I don’t have the delusion that I’m broadly viewed as a teddy bear.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: