Governance and steering of mocs – legal perspective

Abstract

Local governments often use corporations for public service output. In Finland, limited liability companies can be used as a means to produce functions that a municipality is required to engage in by law or those functions that are optional for a municipality. This paper explains the current state, regulative background and reasons for corporatisation in Finnish municipalities. We then present a legal analysis of the legal strategies provided in the legislation that a municipality can use to govern and steer its external corporate bodies. Understanding the legal boundaries and possibilities is imperative for extending local self-governance to MOCs, and to align their goals with those of the municipality.