When Everyone Owns It, No One Leads
1 | Why Governance Still Beats Strategy
Creating a great strategy document is a superpower in corporate settings - It can literally change the direction of your corporation. However, in my opinion a common snag in executing the strategy is corporate governance.
A clear ownership structure with appropriate accountability and incentives for leaders does, in my view, lead to better outcomes compared to diffuse structures. Let’s dig into a few examples.
2 | The Cautionary Tale of Coop
The Swedish grocery retailer Coop, and their umbrella body Kooperativa Förbundet, KF, is a cautionary tale of how cooperative ownership and the associated corporate governance leads to failures.
Coop is owned by 26 ‘customer-owned’ regional co-ops, with the 4 million members being the ultimate owners. KF/Coop was founded in 1899 as an extension of the workers’ movement at the time and in response to high prices. KF was one of the largest companies/corporate groups in Sweden for a long time but they have progressively been selling off assets and slimming down - while making significant losses.
Decision rights at the group are split between regional boards, KF board and Coop Sverige AB management which leads slow alignment on store format, pricing, logistics. ⠀ Hard Numbers
- Combined operating loss for KF + nine biggest regional co-ops: –2.7 bn SEK in 2024, more than double the prior year.
- Sales up just 2.2 % vs. market 4.1 %.
- Coop Syd, one of the larger regional co-ops, posted a –394 mn SEK operating loss in 2024; accumulated losses since 2020 ~1 bn SEK.
They are posting huge losses despite having some of the highest-priced shopping baskets. If they made a loss due to offering customers the lowest price, that would be one thing, but right now it is the opposite. ⠀
When everyone can veto, nobody can steer.
Years of mediocre performance show, to me, that the corporate governance in Coop is a disaster. With lack of accountability and ownership across the board. Unlike their main competitor ICA, where stores are largely run by independent franchisees, store managers at Coop are just employees.
This becomes obvious when you visit the stores, there is a whole lot less care put into the average Coop store compared to the average ICA store.
3 | ICA: Incentives Aligned, Results Delivered
ICA, among the most profitable grocery retailers in Europe, show that incentives drives outcomes. ICA has about 1 300 stores run by independent ICA-handlare/Franchisee who own the local P&L while ICA Gruppen supplies brand, logistics, IT.
The owners of the Maxi concept of stores are famously among the richest in Sweden. And for good reason, they have pricing power to an extent with the ICA brand and work incredibly hard to make the stores the best they can be. Because they are incentivised to do so - They want to buy that new Ferrari.
The incentives are aligned to drive decent corporate governance with the simple (ha ha) goal of delivering a great retail experience while making the Franchisees a boatload of money. That is not to say that there aren’t challenges for the Group to handle the 1 000 franchisees - It must be like herding a pack of very independent and opinionated cats. ⠀ ICA’s 2024 Scorecard
- Net sales 157.2 bn SEK
- Operating profit 6.8 bn SEK
- Margin 4.4 %.
4 | Thoughts on corporate governance
Good governance is invisible when it works and painfully obvious when it fails. Coop’s multi-layered co-operative ideal once looked noble; in 2025 it risks bankruptcy-by-committee. ICA’s entrepreneurial structure makes grocery boringly profitable as their corporate governance is aligned with their strategic aims.
Whether you run a supermarket, a bank, or an AI lab, the lesson is the same: When everyone owns it, no-one leads—and value evaporates.
Patrik
patrik[at]chrono.se