JYY to Increase Efficiency by Reducing Bureaucracy in Business Decisions

In addition to lobbying activities, JYY’s organization also has business operations that manage the real estate and restaurant business worth of tens of millions of euros and owned by JYY’s members, i.e. us, the students. In recent years, JYY has clearly started to focus on further developing and growing the business to meet the interests of students, instead of focusing on mere ownership. The aim of the organizational reform has been to increase efficiency and clarify business decision making processes. A good example of the results of this reform is JYY’s Board of Business, established in 2019, which prepares all business-related decisions and acts as a decision-maker in smaller investment decisions.

More Decision-making Power to the Business Board And the CEO

Until now, the Council of Representatives and the Board of Executives have been responsible of JYY’s decision-making. In the long run, this is not very agile, efficient or even appropriate so JYY decided to to share some of the business decision making power to the CEO and the Business Board. For example, it not necessary to get approval for routine decisions from the Council of Representatives or the Board of Executives. The CEO and the Business Board can best assess the day-to-day operations of JYY’s business and therefore they should be able to make some of the decisions themselves. With the new rules, the Council of Representatives decided to share their power regarding investments, recruitment and contracts. In addition, JYY’s Annual General Meeting practices were modified to better meet JYY’s needs.

The Rule Reforms Increase the Efficiency of the Council And the Board

It is mentioned in JYY’s business strategy that JYY will invest EUR 100 million over the next 10 years. This means that every year JYY will make investments of approximately 10 million euros. Until now, the Council of Representatives has been responsible for all investments and the role of the Board of Executives and the CEO has been unclear in terms of rules. Thus, we have wanted to clarify these decision-making roles as a part of the organizational reform.

The new rules, approved by the Council of Representatives in May, state that the Council of Representatives will still make the biggest real estate-related decisions, such as the construction of new buildings. In addition, the Council of Representatives will each year decide on the investment program authorizations, i.e. authorizing the Board of Executives, the Business Board and the and CEO to make decisions in accordance with the program. This will make it easier for all JYY bodies to operate by clarifying and increasing efficiency in decision-making. It is also important to note that now the Council of Representatives will be able to focus on the big picture, as well as on the policy debates, and the Council of Representatives does not have to spend its valuable meeting time making routine decisions.

In terms of recruitment, JYY was in a situation where the Council of Representatives elected the CEO and the Board of Executives elected all other employees. This was perceived as problematic, as it is not appropriate for the board to be involved in recruiting substitutes for parental leaves. According to the new rules, the Council of Representatives elects the CEO, the Board of Executives elects the CEO’s direct subordinates, and the CEO elects other business employees. The Board continues to represent the employer in all situations.

JYY’s Business to Continue Developing and More Reforms to Be Expected in the Future

JYY’s organization is currently developing at a tremendous pace and although the current reform is now complete, the development work continues. It is now important to establish the new decision-making roles and monitor the effects. JYY invests approximately 10 million euros every year, which means that the organization will continue to experience major changes in the future.

One of the major aims during the organizational reform has been to create the principles of corporate governance. These principles are to serve as a tool for the Council of Representatives when deciding on the broad lines of business. We published a blog post about this subject, in which we explain a bit more about JYY’s business and the Council of Representatives’ business policies regarding the properties that we own. You can read the blog post here.

Other reforms can be expected in the near future. For example, according to the policy in the corporate governance principles, JYY’s financing base must be developed so that non-subsidized construction will increase. In practice, this means that in the future JYY will pay for its new properties both with its own money and with the bank’s money, and this will lead to new corporate reorganizations. The work has already begun, so stay tuned on how JYY’s organization develops in the future!

More information

Juho Neuvonen
Financial Affairs, Corporate Relations

This blog text is a part of a series of articles in which Student Union decision making and activities are made more clear. Blog texts so far: