TOP101 Expert Opinions: Investment and Good Governance Move Estonia’s Economy Forward
Alongside the TOP101 ranking, two of its partners, INVL Family Office and the law firm TRINITI, published expert opinions. Rait Kondor writes about how investment builds a society’s wealth. Tõnis Tamme explains why Estonia needs well-managed companies. Here are the main ideas of both articles.
Rait Kondor (INVL Family Office): investment drives the economy forward
Kondor explains why one company’s decision to expand production matters for the whole economy. In his view, investment:
increases production capacity, because a company that invests in plants, machinery and technology can produce more in future;
raises productivity, the main source of long-term growth in developed economies;
creates jobs, both during construction and in the work of new and upgraded companies;
encourages innovation, bringing new products and better production methods.
The result is a positive feedback loop. Higher productivity means higher wages and profits, which gives the state more tax revenue and allows more spending on healthcare, education and infrastructure.
The Best Investment title went to Lemeks Group, whose subsidiary Estonian Plywood is investing €25 million in expanding its plywood mill in Jõgevamaa. Output will rise from 60,000 to 90,000 cubic metres. Kondor sees three reasons why this matters: Estonian entrepreneurs dare to make large investments in Estonia despite the geopolitical situation; production uses Estonian raw material (birch logs that would otherwise be shipped to Sweden or Finland); and the investment supports regional policy, since the economy is concentrated around Tallinn and Tartu.
Tõnis Tamme (TRINITI): Estonia needs well-managed companies
The TOP101 ranking also assesses the quality of corporate governance. It looks at, for example, gender balance in management, independent supervisory board members, publication of financial and risk information on the company website, and a code of ethics. TRINITI’s special award for the best corporate governance went to Luminor Pank AS, whose supervisory board has included at least two members independent of the shareholders for three years in a row.
According to Tamme, transparent management builds trust and opens doors for Estonian companies in domestic and foreign markets. Investors put their money not only into a good idea, but into a properly managed company. Many Estonian companies supply large Scandinavian and Western European firms, and a weak governance culture can mean being left out of international tenders.
Management board members have a duty of care and loyalty, and breaches can lead to personal financial liability. Clear roles, public internal policies and proper documentation are the best protection for management. Tamme believes the quality of governance in Estonian companies is improving, moving from formal compliance with rules towards transparency, sustainability and ethics.
More expert opinions
The full articles and other TOP101 expert opinions are available at top101.ee/en/experts-opinion. The ranking results are at top101.ee.
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