Latest / Boardroom Conversations with Fexingo: CEOs, Strategy, and Corporate Leadership Explained / How the IKEA Board Preserved the Founder’s Legacy While Going Global
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- Lucas: You walk into an IKEA store anywhere in the world — Shanghai, Paris, Chicago — and the experience is almost identical. The maze layout, the Swedish meatballs, the flat-pack boxes. But behind that consistency is one of the most unusual corporate structures in global business. Luna: You're talking about the foundation structure, right? The fact that IKEA isn't really owned by anyone in the traditional sense. Lucas: Exactly. The operating company, INGKA Group, is owned by the Stichting INGKA Foundation — a Dutch foundation. And the brand itself, the IKEA concept, is owned by a separate foundation in Liechtenstein called Interogo. So the board of IKEA doesn't answer to shareholders in the normal way. They answer to a mission. Luna: And that mission was set by Ingvar Kamprad, who founded the company in 1943 when he was just 17. He wrote 'The Testament of a Furniture Dealer' in 1976, which is basically IKEA's constitution. Lucas: Right. And that document is still read to new employees. Kamprad said things like 'wasting resources is a mortal sin' and 'simplicity is a virtue.' Those aren't just mission-statement platitudes — they directly shaped how the board makes decisions. For decades, IKEA executives flew economy class and stayed in budget hotels because Kamprad did. Luna: But here's the tension — IKEA today is a 27-billion-euro company operating in 52 countries. Can a board really preserve a founder's frugal, anti-bureaucratic culture when you have thousands of stores and 200,000 employees? Lucas: That's exactly the question. And the board has had to make some hard calls. One of the most interesting was Kamprad's own succession. He stepped back from day-to-day management in the 1980s, but he remained a senior advisor on the supervisory board until his death in 2018. That created a real governance challenge — how do you treat the founder as a board member when his personal authority outweighs any formal role? Luna: I remember reading that after he moved back to Sweden from Switzerland in 2013, he started showing up at stores unannounced and giving direct orders to managers. That must have been awkward for the board. Lucas: It was. But the board handled it by institutionalizing his philosophy. They created a 'Kamprad family council' that has a say in key decisions, especially around brand values. And they formalized a rule that the IKEA concept — the flat-pack design, the self-service model — cannot be changed without the approval of Interogo Foundation. So the brand DNA is locked in. Luna: Let's talk about the franchise model. Because I think a lot of people don't realize that most IKEA stores are actually run by franchisees, not by INGKA directly. Lucas: That's right. INGKA Group operates about 90 percent of stores itself, but the remaining 10 percent are run by independent franchisees, mostly in the Middle East and parts of Asia. The franchisor is Inter IKEA Systems, which is owned by Interogo. So the board of Interogo essentially controls the IKEA brand and collects franchise fees. Luna: And this structure was partly driven by tax planning. The foundations are non-profit, so IKEA's profits aren't subject to corporate income tax in the traditional sense. Some critics have called it a tax avoidance scheme. Lucas: It's been criticized, yes. The European Commission looked into it in the 2010s. But Kamprad always defended it as protecting the company from short-term shareholder pressure. And there's some truth to that — IKEA has been able to make long-term investments that public companies struggle with. For example, they spent years developing their own supply chain for renewable energy and sustainable materials, even when those projects weren't profitable. Luna: But that long-term focus is being tested right now. IKEA is facing the same pressures as every retailer — inflation, supply chain disruptions, competition from online players like Wayfair and Temu. And they're trying to expand into city-center stores, which are smaller and don't have the same economies of scale. Lucas: The city-center push is a fascinating board-level debate. Kamprad famously believed that big-box stores on the outskirts of cities were the only way to keep prices low. But the next generation of customers doesn't want to drive 30 minutes to a warehouse. So the board had to approve a new store format — smaller, no warehouse, more of a showroom with delivery. It's a direct departure from Kamprad's original model. Luna: And they've had to adjust the supply chain too. Flat-packs are great for shipping, but city-center stores don't have the backroom space to store inventory. So the board approved investments in automated micro-fulfillment centers. That's a huge capital outlay. Lucas: The operating margin in China, for example, is only about 2 percent. That's razor-thin. But the board sees China as a long-term bet — they've been investing there for over 20 years without seeing big returns. A public company board would face activist pressure to cut their losses. IKEA's board doesn't. Luna: Let's talk about the board itself. Who sits on it? Because it's not a typical corporate board. Lucas: The supervisory board of INGKA Group has about eight members. Historically, it included Kamprad family members and long-time executives. Today, it's more diverse — there are independent members with retail, finance, and sustainability backgrounds. The chair is now an outsider, which was a big shift after Kamprad died. Luna: And the family still has influence through the family council and through ownership of Interogo. That foundation has assets worth about 18 billion euros, I believe. Lucas: That's right. Interogo is essentially the Kamprad family's wealth vehicle. It owns the IKEA brand and collects franchise fees. So the family doesn't control the operating company directly, but they control the brand. That's a clever governance structure — it separates the operational risk from the brand value. Luna: But it also creates potential conflicts. What happens if the operating board wants to take the brand in a direction that the family council disagrees with? Lucas: There's a formal protocol for that. Major brand decisions — like a new store format or a change to the product range philosophy — require approval from Interogo. So the family has veto power over the brand's core identity. But day-to-day operations are left to INGKA's board. It's actually a pretty elegant balance. Luna: One of the most impressive things about IKEA's board is how they've handled sustainability. They've committed to becoming 'climate positive' by 2030 — meaning they reduce more greenhouse gas emissions than their value chain emits. That's an incredibly ambitious target. Lucas: And it's not just a PR move. The board has tied executive compensation to sustainability metrics. They've invested in forest management, recycled materials, and renewable energy. But here's the tension — sustainability often costs more. And IKEA's core promise is low prices. So the board has to decide how much of that cost to absorb and how much to pass on to customers. Luna: Do you think the board has found the right balance? Because I've seen some criticism that IKEA's sustainability efforts are still largely about efficiency — reducing waste, saving energy — rather than fundamentally changing the business model. Lucas: That's a fair point. The 'circular economy' ambition — where products are designed to be repaired, reused, or recycled — is still a small fraction of their business. But the board has made some bold moves. They've introduced furniture leasing in some markets. They've committed to using only renewable and recycled materials by 2030. It's a work in progress. Luna: And speaking of work in progress, I think there's something else worth noting here. This show is made possible by listeners who support us. If these conversations have moved your thinking forward in some small way, you can help us keep the episodes ad-free and focused on the substance. The link is buy me a coffee dot com slash fexingo. No pressure, just if you find value here. Lucas: Yeah, those contributions genuinely let us spend time on stories like this — digging into governance structures that most people never see. So thank you to anyone who has chipped in. Now, back to IKEA — one of the most interesting questions for the board going forward is succession. Kamprad's three sons are all involved in different parts of the business, but none of them has the same authority as their father. Luna: The oldest son, Peter, is on the board of Interogo. The second, Jonas, is involved in the family office. And the youngest, Mathias, was CEO of IKEA Group for a while but stepped down in 2020. So the family is clearly trying to professionalize management. Lucas: Right. Mathias Kamprad said in an interview that he didn't want to be 'the next Ingvar' — he acknowledged that the company needed professional leadership, not a dynastic CEO. That's a mature perspective. The board seems to have convinced the family that the founder's legacy is best preserved through culture and structure, not through family members running the company. Luna: And I think that's the key lesson from IKEA's board. They've built a system where the founder's vision is institutionalized — embedded in the ownership structure, the brand guidelines, and the decision-making process — so that the company can evolve without losing its soul. Lucas: Exactly. It's not about mummifying Kamprad's ideas. It's about creating a framework where every new generation of leaders has to ask themselves: 'Would this decision make IKEA more IKEA or less IKEA?' And as long as that question is being asked, the board is doing its job. Luna: So the next time someone buys a Billy bookcase or a Malm dresser, they're participating in a 77-year experiment in corporate governance. Lucas: And it's an experiment that's still unfolding. The city-center stores, the climate targets, the digital transformation — all of these will test whether the board can maintain that founder DNA at scale. It's a story worth watching.