Christer Thordson Discusses Business, Human Rights and Ethics

Christer Thordson is a new member of the Raoul Wallenberg Institute’s Board of Trustees.

Thordson if a former General Counsel and director of IKEA Group. He has a long career in the private sector and teaching law. Today, he is also chairman of the Fryshuset Foundation in Sweden as well as the Foundation for Entrepreneurship at Lund University. He is a board member of several other companies, including Avicii Music.

We recently sat down with him to discuss the experiences he has had and what he brings to the table.

Why did you agree to become a member of RWI’s Board of Trustees?

I had contact with the Institute a couple of years ago and learned about the Institute’s activities, and when asked to join the Board, it was of course an honour and no hesitations to say yes.

The contact I had with the Institute was in human rights and business together with the Institute’s Senior Researcher Radu Mares. Among other discussions, I participated in a panel on business and human rights in Gothenburg at the Swedish Forum for Human Rights a few years ago.

Recently, I’ve also been working with business and ethics at a global organization and together with other scholars created an international program at university level in commercial and corporate law with a focus on business ethics from my side.

You have a varied background from the private sector. What from that experience do you bring with you to RWI?

There are different dimensions to that of course, but I bring with me the experience of working with different cultures and communities, ethnic backgrounds and societal norms because I was involved in opening up markets in various regions and countries in the world.

ParticuIarly, I was really interested in the political change that took place in Eastern Europe and the Soviet Union when I was working with IKEA in 1990 – 2012. Initially, I experienced the structural change of the society in the East European bloc of countries and the Soviet Union. This included IKEA investments in building up its organization and activities in inter alia Hungary, East Germany, Poland and the former Czechoslovakia, Yugoslavia and the Soviet Union.

These were very challenging times both political and commercially, but also from a legal point of view as these societies were based on a completely different legal system and political thinking. It was a governing political system that had major influence on the rights of the citizens that evidently restricted the freedom of speech, travelling, private ownership and justice in a court of law.

What interested you in politics and migration then?

My family was working and very active in the civil society and I was early on exposed to issues in politics, religion and other social sciences. In my youth, I lived in the Middle East and among other things experienced at that time one of the most well- known refeguee camps, lived in Africa as well as travelled in a number of closed communist countries.

I studied law but parallel to this I have an education in political science. After I finished my legal degree, I also obtained a master diploma in international relations at Johns Hopkins School of Advanced International Studies. So I had one foot in the business and legal field and the other foot in international relations.

Can you explain your interest in human rights?

Right now it’s really interesting to see how many in the world take human rights for granted, counting on the respect for United Nations declarations and international treaties.

There is a tendency to believe that such rights are upheld and protected and then forgetting, or even neglecting, that there is a range of severe human rights violations and challenges in the world. There is a need to continuously highlight and emphazise respect for human rights and actively make people in power positions aware of their obligations to protect the rights of the people.

A major part of this process is to educate new generations and foster research in the human rights area so that it’s not taken for granted. I believe there constantly will be a need to protect human rights against the misuse of power both politically and economically.

Then there’s the other dimension in the business field and with economic globalization where you have major corporations and tremendous, strong supply chains acting in different parts of the world. With this, it’s not only considering human rights when making investments into and operating in various countries but also business ethics in general in the decision-making process.

Business, ethics, human rights and investments is an issue that keeps coming back again. Where do you think we are now compared to when you started in business years ago and what are the gaps?

It’s very difficult to say because it varies from country by country and region by region.

There’s much more transparency right now, and it’s not because of stricter business practices and ethics, but rather it’s due to the speed of information and communication, especially with the use of social media. But there you have bad and good things as well as the social media can easily be misused for different purposes.

I believe that businesses can be more transparent in the actual decision-making. Most corporations are taking huge steps here and include other stakeholders’ interests as they take their decisions, but do not always communicate their reasoning and balancing of different interests. There’s been a huge focus on environmental issues so most of these corporations do have a focus on the environmental consequences of their behaviors and make reports, studies and proper due diligence.

However, there are other issues as well in business ethics that aren’t related to the effects on the environment. In a state or area where you have a regime that is or close to a dictatorship or no or limited respect for human rights, should you invest or not?

Is it the right thing to say that you help people through creating work places when you invest and give people a chance to escape poverty and other misery? Or should you just refrain from investments until the regime gets better with protecting human rights and universally accepted authentic norms?
This is a big issue for the business community and there has been some progress in this respect from the business community with engaging in the UN Global Compact, respecting the UN Guiding Principles, OECD policies on investments, etc.

Do you believe human rights are more difficult to address for businesses compared to climate change and sustainability?

In theory it should not be. However, in pursuit of profit and maximum return of investments for a corporation and its owners, the ethics and human rights aspects, or morale in taking the right actions, may become clearly subordinated.

There are many companies who can maximize profit and returns by behaving in a certain manner in failed states and politically controlled markets because you don’t have any stakeholders or “procecutors” against you, and if you would have, there are tools to eliminate these with bribes, etc. In such markets, the corporation can make profitable business and investments that they can’t do in their home countries. So you leverage and export practices you can’t do in your home country.

Even in the financial world, where it’s difficult to establish a direct link to the societal and environmental effects from the particular financing, there can be more emphasis on “good and ethical” business. Progress on this has been made in several countries’ anti-corruption legislation through criminalization of making financing available for bribes.

In the corporate world you also have the sensitive and delicate issue of tax and tax evasion. Many companies’ management and owners consider that they should according to their fiduciary duty and agreements with the shareholders lower the taxes as much as possible. On the other hand, if you should be a “good citizen” as a corporation and shareholder, it can be questionable with aggressive tax structures to lower the tax costs by allocating the profit to the lowest tax regime.

Finally, within economic globalization there is one fundamental thing I find really interesting – the status and acceptance of corporations. It’s today like a second but virtual person with full powers to act in society, but it wasn’t until the 19th century that in incorporating your business it was accepted at large by the society and legislator that a physical person could limit her personal responsibility through a legal entity.

This fundamental accepted principle has granted people the right to incorporate their business and with this comes a responsibility towards society, not only to maximize shareholders’ interest, but also to acknowledge stakeholders’ interest such as respecting human rights.

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