Chapter(58:(Wallenbergs
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Chapter(58:(Wallenbergs ICC has served world business for almost one hundred years: four generations. In each generation, the Chamber has looked to a member of Sweden’s great banking and industrial family — the Wallenbergs — for leadership. Knut Agathon Wallenberg, the first to serve in ICC, was a banker, politician and Foreign Minister of Sweden for most of the Great War. He had created his own fortune as an entrepreneurial banker and investor in the second half of the 19th century. In later life he created a philanthropic foundation — the Knut and Alice Wallenberg Foundation 1 — that plays a significant role (about $200 million in 2012) in the funding of projects in natural sciences, technology and medicine. K.A. Wallenberg was also the founder of the Stockholm School of Economics, where Eli Heckscher, Gunnar Myrdahl, and Bertil Ohlin taught. Among the talents that made him Sweden’s leading banker, were K.A. Wallenberg’s facility with languages and his close links to the French financial industry before the Great War. So it is no surprise that he took an interest in ICC from its earliest years . He was a signatory to the memorandum issued by the Amsterdam conference of bankers in the winter of 1919 that called for an intergovernmental conference to review financial conditions, international credits and reconstruction policies (also signed by other future ICC leaders, including Walter Leaf). Three years later, he was a leading member of the Finance Group at ICC’s Rome Congress (1923). He helped engineer world business support for what became the Dawes Plan. (His younger brother, Marcus (Sr.) was a member of the League Economic and Financial Committee and served on both the Dawes and Young Committees 2 with ICC leaders). Then, before the World War, his nephew Marcus Wallenberg (Jr.), Joint Managing Director of the Stockholms Enskilda Bank — the “family firm” —became a prominent member of ICC Council and of the Committee on Monetary Policy and Credit. In 1939 he authored a booklet entitled “Money and Finance. - A Survey of Monetary and Credit Policy in Recent Years” for ICC. Marcus (Jr.), the son of K. A. Wallenberg, was the first of three members of the family who have been president of ICC. A tall, commanding figure even in late middle-age, he was an Olympic sailor, a member of Sweden’s Davis Cup tennis team and the first Swede to play at Wimbledon. In business, he was an outstanding leader. The Swedish Prime Minister called him the country’s “greatest industrialist ever”. 3 In banking he created the Skandinaviska Enskilda Bank (SEB, by merger with the ‘family firm’, the Enskilda Bank) that now owns Eurocard. He had a keen interest in technology and innovation. His greatest business asset may have been his ability to build industrial partnerships. (Capital investments seem to have played a lesser role in the creation of the Wallenberg dynasty.) Marcus began, in the mid-1920s, by re-focussing the family’s diesel engine firm, Atlas, on a new technology; compressed air. Atlas Copco, now also in mining and engineering, remains the world’s leading provider of the technology. He joined with Sigfrid Edström, then head of ASEA (and later to be ICC’s war-time president), in a company that built electric power plants in East Europe. He took advantage of the 1930s economic crisis in Sweden to wrest control of the Swedish telephone company LM Ericsson from its then US partner ITT (with some help from Swedish investment laws). Then, in the late 1930s, he formed a partnership that created SAAB (late SAAB-Scania), an airplane manufacture that put Sweden at the forefront of manufacturing technology. He had also assumed control, through the family’s investment company (Investor AB), of SKF, the world's largest makers of ball-bearings and Electrolux home appliances. By the 1950s “…as many as one in seven or eight Swedish industrial workers 4 worked in a company controlled by the Wallenberg brothers.” In 1959 Marcus was chairman of 33 company Boards a member of 31 other Boards. From 1958 to 1964 he was Chairman of the Federation of Swedish Industry (now the Confederation of Swedish Enterprise) and from 1950 to 1975 of the Industrial Institute. During his presidency of ICC (1965-1967), ICC pressed the USA and EC for an ambitious result in the Kennedy Round that took account of developing country needs and expectations. It launched its first determined response to ideological attacks, from North and South, on free enterprise with the “Charter for Private Enterprise” adopted at the Montreal Congress. It also consolidated its partnership with the IGOs in the ICC UN-GATT Consultative Committee. In 1969, Marcus Wallenberg, then ICC’s Honorary President, co-chaired the first meeting of the Consultative Committee in New York with the UN Under-Secretary, Philippe de Seynes and top representatives from the Bank, the Fund and GATT. The Committee’s second session, held in December 1970, also co-chaired by Mr Wallenberg, drew an even larger representation from the UN side. When Marcus died in 1982, his second son, Peter assumed the leadership of the family businesses. The New York Times reported that he had not been his father’s first choice 5 as his successor and that, in Swedish business circles, he was not expected to measure up to his father’s legendary achievements. The family now controlled 9 of the 18 Swedish companies on Fortune 500 (ex-US) list. These, along with some twenty smaller enterprise, accounted for 30 percent of Sweden's gross national product. It was a daunting challenge to which Peter Wallenberg responded with determination, good strategic sense and eventual success. During a period of slow global economic growth and growing regulatory burdens for business in the mid-1980s, he restructured and consolidated the family’s industrial portfolio. For example, the Swedish Social Democratic government sponsored to the ’creation of “wage-earner funds’’. These were investment vehicles controlled by Sweden's trade unions that drew their funds from a business profits tax. Swedish business considered them an attack on private sector ownership. ''The Government wants capitalism without capitalists,'' Wallenberg told the press at the time. Like his father and grand-father, Peter Wallenberg gave his time and efforts generously to ICC. Even as he settled into a corporate role for which he was not prepared and fought off a move by Volvo to take control of some of the family’s prize industrial assets, he accepted a key role in ICC as Chair of the Budget Commission (1983). Six years later, in 1989, the ICC Council elected him President. His strategic skills and success in dealing with business-regulatory burdens were just what ICC needed. Under his leadership the ICC focussed on developing the business and economic integration opportunities presented by the historic liberalization of former socialist economies in East Europe. (The Wallenbergs had long conducted business there. Probably no European industrialists knew the region better.) ICC also developed the very successful Business Charter for Sustainable Development during Peter Wallenberg’s Presidency. It was a breakthrough in setting transparent standards of good environmental stewardship: voluntary and self-regulated by MNEs. The Business Charter’s rules were also a new, valuable technology for ICC. They showed how ICC members could act — rather than only react — to counter the NGOs overheated criticisms of world business. Then, in 2004, a fourth generation of the Wallenberg family accepted an appointment to the executive of ICC. The Council elected Marcus Wallenberg, son of Marc, Peter’s older brother, and grandson of Marcus (Jr.) as vice-Chairman during the Presidency of Yong Sung Park. Marcus made a brief speech of thanks in which he referred to the family’s continuing service and to his own commitment: He said that, although he was the fourth generation of his family holding higher office in ICC, he considered his task as being a great challenge. He explained that the reason for accepting this task was that he believed in the core values of the organization. He underlined that he saw ICC's mission as two-fold. First, to continue to provide efforts to trade and investment liberalisation, including flows of goods and services. Second, he stressed that he truly believed that there was a strong need for global business and that it was in the interest of private business throughout the world to work for self- determination. [Summary record of ICC Council, December 2004] By now, the business operations of the family had taken a new direction. Instead of the ‘hands on’, day-to-day business control that Marcus (Jr.) and Peter Wallenberg had exercised, Marcus and his cousin Jacob (Peter’s eldest son, who heads Investor AB) have re-focussed on their Board roles. Marcus chairs SEB, Electrolux, SAAB and LKAB, the state-owned mining, minerals, engineering conglomerate. He is also on the Boards of AstraZeneca, Stora Enso, Temasek Holdings and the Knut and Alice Wallenberg Foundation 6— that controls, and draws its funding from, Investor AB. Like his forebears, Marcus Wallenberg bought new energy into the leadership of the Chamber. He took over the Presidency a year earlier than planned in 2005 when Chairman Park resigned to deal with serious charges at home arising out of a scandal in his own family company, the Doosan Group. 7 But there were bigger problems for the new Chair. The ICC executive and members — the national committee’s specifically — were unhappy about signs of declining relevance of ICC to world business. Initiative on global affairs seemed to be moving to organizations such as the high-profile World Economic Forum.