News; Nov 27, 2003 CET

Economist with strategic interests

He was at the heart of the action when the Swedish Government’s commercial interests were radically transformed during the 1980s and 1990s. Jan Blomberg joined the Swedish Match Board of Directors in 1996 and now heads the Board’s recently constituted audit committee.

Jan Blomberg had actually considered becoming an authorized public accountant after completing his economics and business administration degree at the Stockholm School of Economics. But things did not exactly turn out as planned. After a few years working as an accountant, he switched tracks and joined the forest products company SCA, where he remained for 17 years, during the last few of which he served as finance manager. After four years as vice president of the steel and forest-products company Uddeholm, he accompanied company president S� Gyll to the corresponding position in the state owned Procordia Group.

“This was the beginning of an incredibly fascinating period, characterized by huge changes in state-controlled commercial operations, that lasted throughout the 1980s and well into the 1990s. The changes involved both major restructuring within industries and modernization of the management of the state-controlled companies moving away from regional politics and toward the commercial and market-based principles that apply to exchange-listed companies,” relates Jan Blomberg.

Procordia itself was one of the key players in this process, particularly in the pharmaceuticals, food and beverages sectors. Swedish Match was also purchased and integrated with Tobaksbolaget.

Procordia was introduced on the stock exchange in 1987 through a new share issue worth more than SEK 1 billion. The next step in the process was the acquisition of Volvo’s food operations and its 40-percent interest in Pharmacia. This made Volvo as large an owner in Procordia as the Swedish State. In the early 1990s, the State and Volvo went their separate ways. The pharmaceuticals interests, comprising Pharmacia and Kabi, remained under state ownership, while the food and tobacco interests were relinquished to Volvo. Volvo in turn sold on the food interests to Norwegian company Orkla, while Swedish Match was listed on the stock exchange. It was at this point that Jan Blomberg was elected to the Swedish Match Board, together with Klaus Unger.

AT THAT TIME, Jan Blomberg was vice president and CFO at Pharmacia. But as everyone knows, the pharmaceuticals sector has not stood still either. In 1995 Pharmacia merged with the US company Upjohn, and this was when Jan Blomberg gradually decided to resign and devote all his time to Board work.

“The main reason was that the Parent Company ended up in the US and the head office in the UK, and I was not interested in moving to either place. But it was also a natural move to change course, since I have been involved in Board work throughout virtually the whole of my professional career.”

In addition to Swedish Match, Jan Blomberg is also on the Boards of Skandia Investment, Capio AB and Svenska Spel AB, as well as being Board Chairman of Handelsbanken Regionbank City.

JAN BLOMBERG HAS NEVER regretted not becoming an accountant.

“After all, the areas in which I have been involved over the years have been considerably more forward-looking. While it’s true that I have always specialized in financial matters and have devoted my entire career to that area, there has always been a link to strategic issues, in which I have a strong interest, and this is also a major element in Board work.”

In spite of everything, he has now assumed a role in which accountancy skills are a major factor, as chairman of Swedish Match’s audit committee, which was established last year. The committee’s main mandate is to “supervise accounting procedures, financial reporting and auditing within the Group.”

“The need for Boards of Directors to have a good insight into operations has increased sharply,” notes Blomberg.

“While Sweden, unlike the US, has not introduced new legislation, the focus on the responsibilities of Boards of Directors has nonetheless intensified. This was the background to the decisions by the Swedish Match Board to institute first a compensation committee, of which I am also a member, and most recently the audit committee. However, the forming of the committees does not mean that the Board has delegated responsibility, since the committees report to the Board, which retains collective overall responsibility.”

MORE STRINGENT REQUIREMENTS also create more work.

“Yes, the amount of work required has increased considerably. There are more meetings, for example. Most Boards have six to eight scheduled meetings per year, plus a fair number of telephone conferences.

“But this also means that Boards of Directors are now much better informed and more closely involved in operations, and this naturally makes Board work more stimulating. In the case of Swedish Match, it is extremely interesting to follow the development of new products and markets, particularly in the snuff product area.”