From insight to action: How Cevian Capital helps good companies to get better

Inside Cevian’s philosophy, and what PLC leaders can learn from its steady and strategic presence.

Over lunch at the Nordic Listed Leaders event in Helsinki, Niko Pakalén speaks about corporate transformation with confidence and clarity, and to the point.

Pakalén is a partner at Cevian, Europe’s largest and one of the most respected active ownership investors. While some might be quick to group it with activist funds, Cevian’s approach is markedly different. It focuses not on confrontation, but on long-term value creation through deep analysis, close collaboration, and strategic engagement. This does not mean it shies away from conflict, but rather that it prefers to work constructively with its portfolio companies. 

Founded in 2002 by Lars Förberg and Christer Gardell, Cevian has built a reputation for making substantial minority investments in major listed companies across Europe. These are firms that already have strong market positions in attractive markets, but in Cevian’s opinion are undervalued and underperforming their full potential, often due to suboptimal strategy/structure and poor execution.

This is where Cevian steps in, not as a disruptor, but as a co-architect of renewal.

Pakalén has been at the center of that mission for close to 15 years already. His board and committee experience spans some of the Nordics’ most notable companies: he has served on the boards or nomination committees of Metso, SKF Group, Neles, Nordea, Tietoevry and Ericsson. Often still the youngest person in the room, he brings a mix of financial expertise, governance savvy, and a fresh-eyed lens on how corporations can and should adapt.

Yet he’s realistic about the process. “Change can be hard and often takes years,” he says. “Some people tend to resist it, especially when they don’t have access to the same information. You need to bring them along, help them understand the possibilities, and show why change is not only necessary—it’s a path to something better.”

That ethos of patient, data-driven persuasion is central to Cevian’s style. Before investing, the firm may track a company for years. Its diligence process often includes over 100 research touchpoints with the executives of e.g., the target company, its competitors, suppliers, customers etc., complementing Cevian’s operational benchmarking and governance analysis. When Cevian does invest, it doesn’t just sit back. Its partners typically take board seats or join nomination committees, bringing a value-creation agenda that can include operational restructuring, spin-offs, M&A, or leadership renewal.

At Metso Outotec (later re-named to Metso), Cevian has supported the company during a period of major transformation, including the merger of Metso Minerals and Outotec. At Nordea, where Niko Pakalén chairs the Shareholders’ Nomination Board, Cevian has been hands-on involved during a time period of leadership change, including changing the Chairman of the board twice, appointment of a new CEO as well as major adjustments to the management team. “These changes have led to Nordea dramatically improving its operating performance during our ownership period,” he says.

But boardroom effectiveness, Pakalén says, depends mainly on the people.

“Good board members are active. Not operational into the details of execution, but curious, opinionated and prepared,” he says. “They have the time to do the work. They understand the business well enough to also challenge it.” While Pakalén acknowledges that the strongest board members are often retired or to-be-retired CEOs, those with crisis experience and strategic depth, he is equally vocal about the value younger members bring. “Many boards could challenge themselves to include e.g., a person from the startup world, in their 40s, who can offer new perspectives on e.g., technological change and sustainability. The best boards have a good mix of expertise and experience. The most important thing is that the person knows how to create shareholder value - be a skillful business man or a business woman.”

Pakalén also flags a practical governance challenge: board members should be able devote a substantial amount of time for the company. A widely recognized industry guideline uses a point system, one point per board membership, two for chair roles to help assess whether directors are taking on too much. The upper limit is typically five points. Beyond that, many of the industry organizations deem directors as overboarded.,

“When someone has too many roles, they can’t be present,” he says. “And presence is everything, especially when a crisis hits.” That being said, Pakalén does not believe in uniform rules. “It is totally situation dependent, the chairmanship of a company under major transformation can easily take three or four times the time of a more mature stable company. This is why I am not a huge fan of rigid point systems, while I am a strong advocate of candidates not taking on more than they can handle. But it is more case by case”.

Referring to moments of global disruption, such as the war in Ukraine, he notes that board members need the capacity to focus quickly and deeply when circumstances demand it. “In those situations, if you’re spread too thin, you can’t respond with the level of attention and judgment that’s required.”

Another dimension of governance that Pakalén understands deeply is culture. He was born and raised in Helsinki, but has lived in Stockholm since 2011 and has a Swedish wife. He has worked extensively with both Swedish and Finnish companies, where he sees subtle but meaningful contrasts. Swedish leaders, he observes, tend to be more optimistic and open to taking strategic risks. There’s a natural growth orientation and a greater tolerance for uncertainty. Finnish executives, by contrast, are often more cautious in their approach, keen to ensure every angle is considered before moving forward.

“Swedes say more easily ‘let’s try.’ Finns say ‘let’s be sure,”  he notes with a smile.

For publicly listed companies, the arrival of Cevian is a double-edged signal. On the one hand, it suggests that a company is fundamentally strong, attractive enough for Europe’s leading active owner to take notice. On the other, it marks the start of a journey toward becoming even better. Not through shortcuts or headlines, but through grounded strategy, governance discipline, and hands-on ownership.

For PLC leaders across Europe, there’s a clear takeaway: the future of value creation lies in the boardroom. And increasingly, it belongs to those who can bridge insight with action.