Articles / Transparency and Openness in Sweden: Compliance [Full Guide: 2022]
The official image from the Public Access to Information and Secrecy Act, published by the Ministry of Justice in Sweden. The following article is written by Transparency Gate.
Transparency and Openness in Sweden: Compliance (Full Guide: 2022)
Did you know Sweden included the principles of public access in it’s constitution already in 1766? This Transparency and Openness legislation gave the general public full access to all public records and has helped Sweden to become one of the most transparent countries in the world.
The Swedish Transparency Act (Transparenslagen) was enforced 22th of June, 2005. It supports the provisions contained in the Freedom of the Press Act and offers guidance on how public and private organizations must stay open and transparent.
The Public Access to Information and Secrecy Act was enforced the 30th of June, 2009, but both laws are often reffered to as the “Transparency Act in Sweden“.
In this article we dig deeper into what exactly makes Sweden so transparent and furthermore on how to stay compliant with swedish transparency legislation.
Contact UsSwedish Compliance with Transparency Legislation
Businesses in many countries struggle to adapt to all the new transparency legislation that seams to be popping up literally everywhere.
We are seing Norway’s own Transparency Act, EU’s Transparency Pledge, and several other countries are adapting to these new laws and at the same time enforcing their own.
Countries like the US, Canada, Germany, Finland and the UK, all have corporate transparency on the agenda for new law making. Not only for munipical organizations, but for public and private companies too.
There are clear indicators that Sweden are one of the top countries in the world when it comes to compliance and transparency legislation. After all, they started in the 17th century.
What is clear is that businesses in Sweden has adopted transparency philosophy as a key component in building trust. And trust, between the general public and corporations are built on compliance.
The Swedish Transparency Act
In 2020, an investigation led by the Swedish Competition Authority (SCA) discovered a severe lack of compliance with the Swedish Transparency Act in two seperate municipal companies. Under supervision from the SCA they were forced to comply with the Swedish Transparency Act going forward.
The SCA concluded that the two municipal companies must comply with the Transparency Act as the provisions of this act aim in particular to simplify the scrutiny of compliance with EU state aid rules.
Statement from the Swedish Competition Authority
The decition was followed by a statement from the Deputy Director General at the Swedish Competition Authority, Karin Lunning:
“The Transparency Act is important. It supports the European Commission on its mission to ensure that companies do not receive unlawful state aid. This legislation also enhances the possibilities to detect unlawful cross-subsidisation”.
The two companies, Stockholm Vatten and Avfall AB have now committed to produce transparent business activities. The requirement to maintain transparent applies to public companies, while the requirement to maintain seperate accounts can apply both to public and private companies.
These accounting requirements aim respectively to ensure transparency on how companies allocate public funds between activities in respect of which a special or exclusive right has been granted and activities conducted on a competitive market. The obligation to produce accounts in accordance with the Swedish Transparency Act applies to companies with a turnover exceeding 40 million EUR.
The decision from the SCA provided guidance on how the rules should be applied.
You can read more about the Swedish Transparency Act here.
Principle of Public Access in Sweden
Did you know that Sweden was the first country ever in the world to make freedom of the press a constitutional right? It happened in 1766, though there was a long tradition that included the principles of informational freedom. Therefore, the mass media and general public had full access to all public records.
It’s national attitude on transparency and disclosure has had a significantly positive impact on business, though it focuses primarily on ethics, compliance, and corporate governance.
The Principle of Public Access in Sweden allows the media and general public to access official records. Anyone can scrutinize governmental activities locally, regionally, and nationally. Transparency can reduce the risk of abusing power.
Civil servants and those working for the government can inform outsiders and the media about what’s happening. Still, some information is classified, such as data involving health and medical care or national security.
Transparency Gate presents a photography of a sunset in Swedens capitol, Stockholm, by Jan Zidlicky.
A Global Fight for Human Rights
Sweden eventually incorporated its European Convention of Human Rights into law in 1995. It also ratified and signed various human rights agreements within the Council of Europe, the International Labor Organization, and the UN.
All foreign policies, including trades, environmental, migration, development, and security, must be based on the rule of law, democracy, and human rights.
Swedish inclusion of Human Rights and Equality
Human rights are protected in Sweden through the Fundamental Law of Freedom of Expression, the Freedom of the Press Act, and the Instrument of Government. Everyone is equal because of those laws and can be free to be individuals.
Laws cannot be put in place that could lead to disadvantages because of gender (transgender expression or identity), belonging to a minority, or factors like age, sexual orientation, disability, religion, and ethnic origin.
Openness Online
Swedes are highly connected, and over nine out of 10 people are on the internet. They can access it at home (98 percent) or via fiber. There’s a broadband strategy in the works that focuses on completely connecting Sweden, which is set to complete by 2025.
Social Media
Roughly 95 percent of all internet users claimed to utilize social media from 2020 to 2021. YouTube is a popular option, with Facebook and Instagram also considered.
Snapchat is in the fourth place and is mostly used by people aged 16 to 19.
Openness on Government Data
Roughly 95 percent of all internet users claimed to utilize social media from 2020 to 2021. YouTube is a popular option, with Facebook and Instagram also considered.
Snapchat is in the fourth place and is mostly used by people aged 16 to 19.
Openness on Government Data
Sweden features a website (openaid.se) that focuses on the idea of transparency and is built using open government data. Individuals, aid recipients, NGOs, and officials can access or study this information.
The goal here is to be more open and transparent about humanitarian efforts, inspiring other institutions to do the same.
Transparency International Sweden: Worldwide Study
Overall, most Swedes conclude that open and transparent national culture correlates directly with business-friendly environments and competitiveness. Large Swedish brands, such as Ericsson, Atlas Copco, H&M, and Tele2, seem to get better results compared to the world average for transparency reporting.
Transparency International Sweden conducted a survey using the same methodologies as Transparency International in its worldwide study. It shows that Swedish brands get high scores in these areas:
Country-by-country Reports – This measures the company and its disclosure of investment, revenue, income tax, charitable donations, and income before tax. It offers a way to ensure companies pay taxes within the countries they operate, allowing the money to go toward legitimate projects and objectives for society.
Organizational Transparency –This relates to disclosures focusing on a complete list of partially- and wholly-owned subsidiaries, data on where these companies are registered, how much the company owns (percentage), and information on the countries where the brand operates.
Reporting on Anti-corruption Programs – To receive high scores here, the company required an anti-corruption or code of conduct policy that applied to all board members and employees. It had to contain clear-cut restrictions and rules for hospitality and gifts. Likewise, the company needed a reporting channel so that employees could anonymously report violations of the whistleblowing (anti-corruption policy) without receiving repercussions.
There are significant differences between international and Swedish scores in all three areas, especially for organizational transparency and country-by-country reporting. Generally, people believe this is associated with its culture of access to information, transparency, and openness.
Impact on Business
One could argue, there’s no real need to set up transparency acts that require due diligence because most companies already conform to this idea without a rule in place. Likewise, there’s a positive connection between competitiveness and transparency in business. Trust is a key factor here.
Within a hyper-networked and globalized business environment, shareholders, regulators, customers, board members, and business partners require transparency before they trust a business entity. They wish to understand how companies spend and earn money, who manages them, how much they pay to senior managers, and if they’re diligent about social and environmental issues.
Companies could incur serious negative impacts if information spreads externally, especially if it’s untrue. It happens in mere minutes. Here’s one example:
United Airlines’ parent company posted an article about its 2002 bankruptcy, which resurfaced in 2008. Most people mistakenly believed that the brand was filing another bankruptcy. Therefore, stock prices dropped by 76 percent in a few minutes before NASDAQ could stop trading.
Though the news was identified as being false and stock prices rose, the company ended the day about 11.2 percent less than it did on the previous close. To prevent or mitigate these situations, there must be a company culture based on transparency and trust. Therefore, everyone has access to the records and can verify relevant information.
Linking Transparency to Profitability and Resource Allocation
Clearly, corporate transparency offers benefits for profitability and investments. It’s crucial because it helps make the case for transparency as a critical element of the governance infrastructure. Here’s how transparency could drive investments:
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- Companies can better exploit business opportunities by using a transparent business environment like Sweden. Investors can recognize the benefits and chances they can take, directing resources toward a specific market.
- Corporate transparency can assist with growth rates in specific industries because it helps channel those resources to transparent sectors.
Transparency doesn’t just help companies relocate resources effectively. It can increase long-term profitability, too. Institutional investors have recognized that the long-term investment incentive is broken. Therefore, they’re developing new rules for corporate governance, which prioritize sustainable value instead of short-term aspects.
While transparency is the right thing to do, Sweden doesn’t require strict rules to implement them. Regardless, there are a few acts already in place that protect a person’s rights and offer due diligence.
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“The Swedish Competition Authority, reffers to the Swedish Public Access to Information and Secrecy Act, as “the Transparency Act”, essentially meaning the sum of all transparency legislation.”
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