Kjeld Kirk Kristiansen to leave toymaker’s board as family owners prepare for future
The family that owns and founded Lego is pushing ahead with a generational shift as the former longtime chief executive of the Danish toymaker steps down from its board.
Kjeld Kirk Kristiansen on Tuesday said he would quit Lego’s board next month, leaving his son Thomas as deputy chairman and the representative of the fourth generation of the family that started the toymaker in rural Jutland almost nine decades ago.
“For several years we have been preparing carefully for how we wish to continue to maintain active family ownership across generations. Now, the time has come for the next step,” said Mr Kristiansen, who will remain for the time being as chairman of the family investment company, Kirkbi.
The Kristiansen family have been preparing for the generational shift over the past 15 years with Thomas first joining the board as an observer, then as director in 2007, before taking over in 2016 as deputy chair and head of the Lego Foundation charity.
Kjeld Kirk Kristiansen, 71 years old and grandson of founder Ole, was chief executive from 1979 until 2004 but had to step down as the maker of plastic bricks was on the brink of financial collapse.
As Lego recovered in the 2000s to become the world’s largest toymaker by sales and profits, the Kristiansens plotted how to avoid the intergenerational strife that often plagues family companies.
They decided that each generation would have one individual known as “the most active owner” who would take on the responsibility for being the main voice of the family, fixing on 40-year-old Thomas rather than his two sisters. At the same time, they defined what the family alone would be responsible for including the selection of Lego’s chief executive, board of directors and important cultural decisions.
“What Thomas and his sisters are inheriting is something that is much more global, much bigger and more complex than Kjeld. We don’t think we have found the Holy Grail of family ownership. But it works for this family,” said a senior Lego official.
The Kristiansens have indicated that the family will provide the chair for Kirkbi and the Lego Foundation — which own 75 per cent and 25 per cent respectively of Lego — but that an outsider is likely to head the toymaker’s board. That is currently Jorgen Vig Knudstorp, the former chief executive who saved the toymaker after his appointment in 2004 and now also heads the Lego Brand Group, exploring new possibilities for the marque.
Executives at Lego credit the family with giving them a longer-term focus than stock-listed rivals such as Mattel and Hasbro, which the Danish toymaker has overtaken in the past decade as part of a big global push to bring its toy bricks to children in Asia and the US as well as its traditional stronghold of Europe.
Thomas Kristiansen and Mr Knudstorp are interviewing candidates to replace Kjeld Kristiansen on the board, and the two men are also co-operating on the 2032 centenary celebrations planned for Lego. It is expected that Thomas will take over from his father at Kirkbi, which also owns stakes in other Nordic groups such as ISS, Falck and Nilfisk as well as a 30 per cent stake in Merlin Entertainment, which owns Legoland theme parks.
Source: The Financial Times, March 27, 2019 | Richard Milne