The Wallenberg family of industrialists has begun its transition to a sixth generation as the power behind companies worth $700bn such as Ericsson, ABB, AstraZeneca and Saab breaks with tradition and considers 30 relatives for its succession planning.
Cousins Jacob and Marcus Wallenberg, both 68, who together with fellow 65-year-old cousin Peter represent the fifth generation, told the Financial Times that they had started offering observer roles on their foundation and corporate boards to the next generation, whose members are aged 12 to 45.
“At the end of the day, we are not growing younger. What we are doing is trying to prepare for the future, trying to prepare for the next generation. Exactly how and when that happens, time will tell. But we are clearly taking steps by giving them these roles,” said Jacob.
Marcus added, in a rare double interview: “One reflection is that the earlier we can give responsibilities that resonate with the individual, the better it is. There’s no wish to hold them back.”
Marcus said that, for the first time in the family’s 168-year corporate history, women were likely to be involved in its leadership, something he and his cousins “would welcome very, very much”.
The Wallenbergs are one of Europe’s leading family of industrialists, with large stakes in companies ranging from industrial groups Atlas Copco and Electrolux to private equity firm EQT and stock market operator Nasdaq.
In an unusual structure, the family themselves do not own the stakes, which instead are run by family foundations providing billions of Swedish krona annually to basic scientific research.
The foundations own assets of more than $30bn but have stakes, often controlling ones, in listed businesses with a combined market capitalisation of more than SKr7tn ($660bn)
That explains why the three cousins do not appear on Sweden’s rich lists. They are, however, each drawing an annual salary of SKr12.8mn ($1.2mn) as well as board fees.
Each of the first five generations of the Wallenbergs have provided just one, two or three members to oversee the companies they own through corporate boards as well as the foundations and their research projects.
But Jacob and Marcus said there were likely to be more than three people in the next generation. They believe they need to share the responsibility more broadly as the complexity of business and regulations has increased.
“Yes. It will be a team,” Jacob said, when asked if it was likely to be more than three.
Marcus added that he and his cousins had worked hard to divide the Wallenberg ecosystem into three different “buckets” that the sixth generation could choose between depending on their interests: business, foundations, or family.
“The activities that the family is involved with have expanded quite significantly over the years, and so that requires probably more people . . . Our hope and wish is that they would work as a team because we believe that this is going to be the most powerful outcome. The environment has changed drastically over those years in terms of regulatory issues, the size of the businesses,” he added.
The Wallenbergs have built up a vast network of corporate and political contacts across the globe, and the cousins said they had started taking members of the sixth generation with them on business trips.
Some of the 30 members of that generation work in the Wallenberg ecosystem, but most do not. They include an interior designer, a lawyer specialising in French environmental law, a credit analyst at a bank, and a vice-president at a US start-up. Two-thirds of them have observer roles, mostly on the 16 family foundations but also in some of the investment companies.
The family is keen not to single out any individuals as taking a leading role in the sixth generation. All the observer roles — including positions on the main family council — are on a rotating basis to allow the sixth generation to see what interests them: investing, helping with research and the foundations, or running the family side.
Currently, the three cousins are all involved in each aspect, although Jacob has the lead for the family, Peter for the foundations and Marcus for business.
Asked if it would be relief for the trio to get help from the sixth generation, Marcus answered: “Yes. I think not only relief, but also if we do this in the right way, I think it would make us very proud. The last thing we want to do is just to stand up from the chair and walk out the door. I mean, we really want to be there for them.”
Succession planning is one of the hardest aspects of any family business with dynasties from the Murdochs in media to the Arnaults in luxury goods grappling with it. Experts say that it tends to get more difficult with successive generations as the number of people involved multiplies.
But the Wallenbergs said their unusual structure, in which they themselves do not own the companies, helped take away one factor that led to problems in other family businesses.
“If you look at a number of the bad examples it’s frequently about money. In our case, it cannot be about the money or the capital in the companies as we are not the legal owners of it, we are just managing it. Hence there is nothing to quarrel about or fight about there,” Jacob said.
The sixth generation of the Wallenbergs should look at investing in asset classes other than equities, even if corporate ownership will remain the core of the family, the cousins added.
Marcus conceded that the family had not paid “much attention” to different asset classes in the past, other than helping set up the private equity firm EQT.
But he added: “We are now digging a bit deeper into that to see how it can complement our current asset classes. However, we do not see those replacing our interest in equities or the engaged owner concept.”
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