‘None of these scenarios is good for the business.’ Inside Ikea’s decision to withdraw from Russia

Jesper Brodin, the CEO of Ingka Group—better known as Ikea—is one of many CEOs who has wrestled over the last six weeks with how to respond to the Russian invasion of Ukraine. The company built up a sizable business in Russia, with nearly $2 billion in annual sales last year. And the right way to respond to Putin’s invasion, Brodin told Ellen McGirt and me last week, “was not obvious.”

“I myself have been part of the generations at Ikea that for more than 20 years have been building up our business in Russia… It’s a little bit like the pandemic—there is no manual or guidebook for us here. It’s about weighing all aspects of the situation, trying to get a 360-degree perspective of the situation, and using our moral and ethical compass to do the right thing.”

The company had to consider the effects of a decision not just on its business, but on its employees, and on innocent people in Russia. In the end, it closed its Ikea stores, and discontinued furniture exports to Russia, but kept open Ingka’s shopping malls to make sure Russians continued to have access to food and pharmaceuticals. The job required balancing the needs of various stakeholders—customers, employees, global society. 

Interestingly, he said, there was little discussion of the effect on the company’s business.

“None of these scenarios is good for the business. We can take that out of the equation. There is simply no good business path… When it comes to the moral and ethical right thing to do, that goes beyond the size of your business. It’s a difficult question, I think, for all of us.”

You can listen to more on how this one company dealt with the challenge of withdrawing from Russia on Leadership Next, via Apple or Spotify.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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This edition of CEO Daily was edited by Bernhard Warner.