In time, family business structures will become more complex, leading to inevitable conflicts within the family circle. Disagreements are necessary to break from inertia and adapt to new circumstances which arise from changes in the environment or because of the family or company's natural evolution. Therefore, we must understand that conflict or crisis' in family businesses are not necessarily negative: depending on multiple factors, these situations can be healthy, functional, or dysfunctional. An instructive approach can be seen in kanji (a writing system adopted by the Japanese), which comes from the word "crisis" (Kiki, in Japanese): This concept is formed by the characters "danger" and "opportunity": precisely the understanding that the Japanese culture has of adverse circumstances, which has helped them overcome multiple tests which they have been subjected to throughout their history. The more there is at stake or, the more serious the conflict, the better it will be to affront it. What doesn't work is to avoid or deny it. That is why, to solve it, a healthy level of communication between family members and acknowledging the growth opportunities that danger brings us is advised. The different ways of conflict resolution are, by the end of the day, possible strategies in the same scenario, but none is a panacea. If the rules of the game are established in advance, many conflicts can be avoided in the business family and the family business. There are three ways to solve them: Conciliation : the parties in dispute must understand that the best way to reach an agreeable solution is to comply with an alternative that benefits the whole and not only one of the parts. Therefore, we are before a conflict-solving mechanism based on a consensus of ideas, in which each individual commits to a solution that delivers an acceptable level of satisfaction for all. This requires a good dose of generosity from the individuals, acceptance, and respect for the other, a good disposition in wanting to find a solution to the conflict, effort, and in many cases, sacrifice, or transformation of one of the original viewpoints, which were presented at the beginning of the discussion. In these cases, an external figure with peace-making abilities may assist the group in a satisfactory solution to their conflicts. Mediation : this comes into effect when no conciliation is desired, the conflict is more significant, and the best way to solve the situation is by negotiating between the parties since conciliation has been ruled out. It is the most successful method used in divorce cases. It attempts to establish a dialogue between the parties to reach the best possible benefits for everyone, not for the group. If they cannot face the conflict by themselves, they may seek expert professionals (mediators) to help them find acceptable solutions for everyone. Arbitration : The parties admit that there is an irreconcilable conflict and being unable to solve it by themselves and having ruled out mediation, they seek other instances. This is when the figure of an arbitrator comes into place, a third party which may be a trustworthy employee who does not belong to the family, a lawyer, an advisor, a priest, or any person whose integrity is unquestionable and is accepted by everyone in the group. In this case, the arbitrator will act as a judge favouring some parties. We are no longer before a solution based on agreements, dialogues, or negotiations that have satisfactory results for everyone, which is why this is not the most recommended alternative. However, when significant family conflicts arise, those real sagas which make history, arbitration becomes the most popular way out of the crisis. How conflicts can be solved are different possible strategies to address the same scenario. However, none of them is a panacea. If the game's rules are established beforehand, many conflicts between the business family and the family business can be avoided. About the Author - Guillermo is an Affiliate Senior Advisor at Cambridge Family Enterprise Group and founder of director of Exaudi Family Business Consulting. He is a lecturer, educator, author, and expert advisor on family governance, strategic succession planning, generational transition, and conflict resolution. He is an FFI Fellow, former FFI board member. Guillermo is the recipient of the 2015 FFI International Achievement Award. He can be reached at He can be reached at gsalazar@cfeg.com.

Family businesses are often hailed for their tight-knit culture and shared values, but they are not immune to conflict. In fact, conflicts within family firms can be particularly complex, as they often intertwine personal and professional dynamics. However, non-executive directors (NEDs) can serve as invaluable resources in alleviating and resolving these conflicts, offering fresh perspectives, impartiality, and strategic guidance. Understanding Conflict In Family Firms Conflict within family businesses can arise from a variety of sources, including: Succession Planning: Disagreements over who will lead the business in the future. Role Ambiguity: Tensions stemming from unclear roles and responsibilities, especially between family and non-family members. Communication Breakdowns: Differences in communication styles and preferences leading to misunderstandings. Sibling Rivalry: Personal dynamics and historical rivalries among family members spilling into the business environment. Dealing With Conflict Addressing conflict in family firms requires a proactive and strategic approach. Some effective strategies include: Open Communication: Encouraging transparent and respectful communication channels to address issues as they arise. Conflict Resolution Processes: Implementing formal conflict resolution mechanisms, such as mediation or facilitated discussions. Clarifying Roles and Expectations: Establishing clear roles, responsibilities, and decision-making processes to minimize ambiguity. Seeking External Expertise: Bringing in outside consultants or advisors with expertise in family business dynamics. The Role Of Non-Family Directors And NEDs Non-family directors and NEDs bring a unique set of skills and perspectives that can help mitigate and resolve conflicts within family firms: Impartiality: Non-family directors and NEDs are not emotionally invested in family dynamics, allowing them to provide impartial advice and mediation. Strategic Insight: With experience in diverse industries and corporate environments, non-family board members can offer strategic guidance and fresh perspectives on resolving conflicts. Mediation and Facilitation: Non-family directors and NEDs can act as mediators or facilitators during conflict resolution processes, helping to navigate tensions and find common ground. Governance Oversight: NEDs can play a crucial role in establishing governance structures and processes that mitigate the risks associated with family conflict, ensuring accountability and transparency. Conflict As A Catalyst For Growth While conflict within family firms is often viewed negatively, it can also serve as a catalyst for growth and innovation. Healthy conflict encourages constructive dialogue, challenges the status quo, and fosters creativity. Non-family directors and NEDs can help reframe conflict as an opportunity for learning and improvement, encouraging family members to embrace differences and leverage diverse perspectives for the benefit of the business. Conflict is an inherent part of any business, but in family firms, it can be particularly challenging due to the intertwining of personal and professional dynamics. Non-family directors and NEDs play a crucial role in alleviating and resolving these conflicts, offering impartiality, strategic insight, and governance oversight. By harnessing the expertise and perspectives of non-family members, family businesses can navigate conflicts more effectively and emerge stronger and more resilient than before. About the Author - David Twiddle is the founder and Managing Partner of TWYD & Co, an Executive Search and Advisory firm built differently for thriving business families, entrepreneurs and ultra-high net worth individuals, around the world. Find out more at www.twyd.co

Riaz Currimjee is the Founder and Managing Partner of Surya Capital, the family office backed Africa focused private investment firm he set-up in 2016, and also a Non-Executive Director of his family’s company, Currimjee Jeewanjee & Co Ltd, one of the largest family-owned multi-sector conglomerates in Mauritius. He is both an intrapreneur: a driver for change within his family’s company, and an entrepreneur outside it. As a result, he offers a tremendous insight into how to keep the entrepreneurial spirit alive through multiple generations, as well as how to avoid falling into the ‘clogs to clogs in three generations’ trap. The Currimjee Jeewanjee & Co story begins back in 1884 when an adventurous twenty-two-year old, Currimjee Jeewanjee, Riaz’s great-grandfather, set foot on the shores of Port Louis, Mauritius, from Gujarat, India. He started a small business in 1890 at Louis Pasteur Street, trading in commodities, which grew over 130 years into a conglomerate with significant interests in telecommunications (as controlling shareholder of Emtel, the first mobile telecommunication company in the Southern Hemisphere and the first to launch 3G in Africa) and founding shareholder of Bharti in India. Its other business interests include: satellite television, real estate, hospitality, tourism, energy and FMCG, including partnerships with Airtel, Canal+, Total, Minor, Singapore Airlines and PepsiCo International. “We are the fourth generation of a Mauritian-based family business which was set-up by my great-grandfather,” recounts Riaz. “He set-up a commodities trading business: exporting sugar from Mauritius to India; importing spices from East Africa; importing rice from India, and investing the proceeds in real estate.” At that point, Mauritius was an English colony, Riaz explains: “The economy was effectively dominated by a handful of Franco-Mauritian families: descended from the French who established Mauritius and who owned most of the land and big sugar plantations,” he says. Riaz’s great-grandfather had two sons: “Although my grandfather was the younger brother, he very much led the business which he expanded into industry in Mauritius and the Indian Ocean region: he bought a cement factory in Madagascar and took the business into a variety of what used to be called ‘export substitution industries’.” Riaz explains that because Mauritius was an island which depended on imports for everything, the Government encouraged some of the more established business groups to start manufacturing. “We got into manufacturing, initially making soap and laundry products, set-up a Pepsi bottling plant and a (then) joint-venture making fats; butter and spreads, as well as still importing and distributing rice,” he says. In the 1970s, the company was among the first pioneers to launch a textile manufacturing business in Mauritius. “In the late 70s/early 80s, Mauritius became a hub for manufacturing textiles, starting with knitwear,” explains Riaz. “Mauritius benefitted from having no quotas into Europe or the USA and the Mauritian Government set-up, what was then very forward-thinking, Export Processing Zone (“EPZ”) – in the UK you would call them “free ports” – where you could set up a manufacturing business exempt from taxes and other duties for ten years. It became the family’s biggest business by turnover for a number of years until we launched the first mobile company in the Southern Hemisphere, which became operational in 1987,” says Riaz. After that the family business expanded and diversified into many different sectors, but up until the launch of the mobile business, the company was always family run. The importance of good governance “The mobile company was a joint-venture with an international company, so professional management was hired,” says Riaz. “We then set-up a joint-venture with Canal+, the French broadcaster, to set-up a satellite television business which was also professionally managed. Previous to that we had a joint-venture with Elf, which became Total, in downstream oil and gas, which was also professionally run. By accident more than by design, these businesses became the biggest businesses and they were all professionally run whereas the historical businesses, the industrial, FMCG businesses, were still managed by family members.” he explains. According to Riaz, there were a couple of major pain points in the family. “The textile company was set-up by my uncle who was a great visionary, strategic thinker, but he brought in his two sons straight from university, neither of whom really wanted to be involved in the business, and who didn’t have any real work experience. He gave them responsibility beyond their competence and experience and whilst they worked hard, it was very challenging. Because of this, and a variety of other reasons, the textile company alongside other textile companies in Mauritius, started to have financial difficulties,” Riaz reveals. “My uncle believed the company could be turned around, while it was pretty clear that it was beyond saving. It was a big business employing 3,000+ people and he convinced the family to give him another chance." “At the same time, we had invested, as founding shareholders, into what became one of the first mobile operator in India, called Bharti Airtel,” Riaz continues. “We sold most of our shares in what became the largest mobile company in India to fund that attempt, but the textile company went “bankrupt,” he adds. “It was a real tragedy.” Avoiding conflict “A few years after that happened, I wrote a letter triggered by those events: that we sold out of what became a massive company to fund a company that then went bankrupt, all because we wanted to avoid conflict,” recounts Riaz. “I emailed that letter to every single member of the family and it said things that had never been said, or written down in the 100 year history of the company. I used words like nepotism and destruction of shareholder value – not very diplomatic or tactful!” Riaz exclaims. “My father told me not to do it, my cousin, who is now the CEO, told me not to do it and some of my relatives didn’t speak to me for a few years! It was very badly received by most, particularly those that worked in the family business, but well received by the minority shareholders, especially the women who didn’t work in the family business and didn’t have a voice,” he says. “Avoidance of conflict has been a theme throughout the family: it’s probably the reason we’re still united after four generations, but it has also meant that a lot of tough decisions are avoided,” Riaz reveals. “I actually don’t mind conflict at all, sometimes I relish it, so I’m very different from most of my family in that respect!” he adds. “Without being immodest, I do believe that letter started discussions, first within the individual families and then eventually within the wider family, about issues such as governance, accountability and dividend payments.” Riaz says. Towards better governance About twenty years ago the company appointed two brothers who were family business advisers from Kenya. “We started what has now become a tradition, of yearly family meetings. We meet once a year in a hotel with the first day as effectively a shareholder meeting, and then there are family events and bonding etc, explains Riaz. “The relationship with the Kenyan advisors didn’t last and after a few years we started working with Professor Randel Carlock, Emeritus Senior Affiliate Professor of Entrepreneurship and Family Enterprise, and Christine Blondel, Adjunct Professor of Family Business, from INSEAD, who ran a series of workshops,” Riaz explains. “As a result we decided to put in place a shareholders agreement, which we didn’t have because the business was set-up in 1888! It took a while because we had to retro-actively agree a number of important issues; and we set-up a family council with a family constitution,” he adds. “So things have moved-on a lot.” The family now has two holding companies, one covering the historical FMCG companies which is family run, and one which is effectively the main investment holding company and which generates 95 per cent of the profit. Choosing your own path “I’ve been the defender and the voice of the minority shareholders,” says Riaz. “I have no problem picking a fight and saying things that nobody else dares, or is comfortable, saying. Had I joined the family business, who knows where I would be today in terms of role and responsibility but I would have asked to be interviewed and independently assessed for any roles I sought or was chosen for,” he explains. "My father was a great contrarian. He didn’t join the family business. He was an architect and set-up a practice with his cousin. They remained equal shareholders to their brothers and non-executive directors, but they didn’t join the family business. I guess my dad inculcated that contrarian gene in me,” Riaz says. “I have been fascinated by business all my life, but I always wanted to do my own thing. Maybe I was driven by a slightly immature ambition to prove myself, to be my own man. I am utterly conscious of how lucky I am. I didn’t choose to be born into a family business that, in the context of the Mauritian Indian Ocean, is big and just happens to be on a paradise island,” Riaz quips. “I did four years at Arthur Andersen and qualified as a chartered accountant then I spent just over four years at Lazard in M&A. That was the point at which I wrote my letter to family members and effectively realised that my role was to be that voice of constructive criticism, keeping people accountable, and challenging the status quo,” he explains. “I’m adding value, but in a different way than operating a business.” Riaz hasn’t walked away from the business. “I’m on the Board and have been for years, and I’m active as a non-exec,” he says Can the entrepreneurial spirit be kept alive? “It’s very challenging, because we were entrepreneurial,” claims Riaz. “My uncle sat next to the CEO of one of the first emerging market telecommunications companies in a hotel lobby in Sri Lanka in the mid-80s and that led us to get into mobile phones; nobody else in the Southern Hemisphere had mobile phones. And I could mention example, after example, after example before that. There was a huge amount of entrepreneurship until the third generation. I feel that my generation, with a few exceptions such as my cousin who is the CEO, doesn’t have the same hunger, the same ambition, the same drive as previous generations; perhaps there’s a feeling of entitlement,” he muses. “If the people at the Board level and the owners of the business are no longer as entrepreneurial as they used to be, you can’t turn a switch and make them entrepreneurs. Those of us that are entrepreneurial are just going to have to be louder,” he adds. Clogs to clogs in three generations “I know that expression very well and we got very close to it!” exclaims Riaz. “But we were very lucky in that we entered into joint-ventures which encouraged professional management. We were able to compare the performance of the family-run businesses with the performance of the professionally-run companies and it was pretty clear that we were much better off having professionals run our businesses than family members,” he admits. “We are also united by a set of values and through the tough times, what united us was stronger than was separated us. I am very proud that we have stayed true to our values and never compromised on them”, Riaz adds. “Now we are unequivocally on the path to being a professionally run family-owned business,” Riaz says. “We’re not there yet. “We have a shareholders agreement, a family council, the main holding company has a proper Board in the sense that there is over 40 per cent strong NEDs, with an audit committee, a governance committee and remuneration committees that are independently chaired. We effectively mirror public company corporate governance,” Riaz claims. “It really is a very well governed company and the rest will follow. We are heading towards a situation where only in exceptional cases will family members work in the family business." Leveraging an unfair advantage “When I was an associate, a senior associate, a VP in investment banking at Lazards, my family’s business and reputation had no relevance in Europe,” explains Riaz. “When I was working in India, my family had very good, deep relationships with the Indian industrial class so I leant into the family a little bit then. Maybe it was ego; I so wanted to be independently successful, that I didn’t want to use something that was so obviously available to me,” he admits. “Then I started doing private equity in Africa. Mauritius is seen as an African success story, so saying that I come from Mauritius and from a 130 year old successful business was a major icebreaker in conversations with entrepreneurs or family businesses in Africa, so I absolutely used it. Now I have no problems using it,” Riaz says. “It is part of my DNA, my heritage and in many ways where I learnt about business.” Where Riaz still hasn’t managed to use it is in his investment fund business. “Until now I’ve been operating on a deal by deal basis and my family has never backed me in a single deal. As we don’t yet have a proper independent process to invest in businesses set up by family members, I am not sour about this as I would only expect an investment if it had gone through a strict process,” he explains. “But what we do need to figure out is how to back people who are entrepreneurs outside of the family as we could be missing out on excellent opportunities and on ways to keep the family entrepreneurship heritage alive,” he adds. “Those models work if there is real accountability, if people accept that there’s a process which is independent and that it’s fair. Some people will get a ‘yes’’ others will get ‘no’s’, and it won’t be because they are the brother or the cousin or the best friend of an executive. We do want to do that, but it might take a few years yet,” Riaz admits. “I prefer not being backed by my family than being backed by my family without due process”, Riaz adds. Opening the door to the next generation “My kids are eight and six, so it’s a bit early!” jokes Riaz, “but the family business has a process. There’s a written policy for employing family members and a path they need to take. There’s a two year internship revolving around different companies and reporting to non-family members, to determine whether family members are hireable full-time,” he explains. “Now there’s also a process to encourage the fifth generation to get to know the businesses more through internships and that’s being driven by Christine Blondel, a NED on the Board who has lots of experience,” Riaz says. “My partner and I in my investment company have decided not to be a family business,” he shares. “We’re going to hire people and eventually we’ll retire. We both agreed that if the venture succeeds and grows, it will be structured like other private equity businesses, and we will sell or relinquish our GP stakes to the new GPs who come in. My kids will have the option to go back to Mauritius if they want to where there will be a process and a path for them to follow, or they will do their own thing,” he concludes. What three things are important for an entrepreneur to succeed? “Number one is to spend six or seven years in a big company. If you want to work in finance, go and work in an accountancy firm, consultancy firm or an investment bank. Although the world’s changing so fast today that kids are finishing university are doing start-ups and being very successful at it, I’m talking more generally,” says Riaz. “Number two: even if you want to do your own thing and be independent, don’t shoot yourself in the foot by not taking advantage of what the family offers. It can offer capital, but more importantly it offers a network. If you come from a successful multi-generation family business, they know people and they know people who know people, and the reality in business is that networks matter the most. “The third thing is don’t be afraid to ask for advice. You want to be independent, but there might be people in the family business, either family members or executives in the family business, who are very capable at finance, operations, or marketing. They can be mentors, advisers, people you can bounce ideas off.” he concludes. What three things are important for an intrapreneur to succeed? “You need to be even more meritocratic and more accountable than in a non-family business, because there’s always going to be the perception in a family business that the family member has an unfair advantage over other colleagues,” says Riaz. “Important for my family, and in the context of Mauritius which is small, is our reputation for integrity which is probably the best of any family business in Mauritius. That took 130 years to build and it can be destroyed in one day, one hour, or one second.” “Working for a family business is a huge responsibility: you have a responsibility to be even more meritocratic and accountable or you won’t attract the best people, and you have to respect, defend and uphold the values of the company because those are your biggest assets." “Finally, take advantage of the non-financial assets, like networks, that some people overlook,” Riaz concludes. About the Article This interview was conducted by PKF Littlejohn and first appeared on their website and has been reproduced here with their permission.

Frozen food distributor Central Foods has partnered with global food company Tyson Foods’ UK division to increase Tyson’s distribution to independent frozen food wholesalers in the UK. The industry giant will offer a selection of products via Central Foods such as Hot ‘N’ Kickin® crispy chicken wings, chicken breast kebabs and skewers, coated chicken fillets and crispy inner chicken fillets. Mainly chicken products, the items will complement Central Foods’ popular own-brand range of Golden Valley Foods poultry options. Gordon Lauder, MD of Central Foods said: “We are very pleased to be working with Tyson Foods to extend the company’s distribution network in the UK." “Tyson Foods has a reputation for supplying great-tasting, best-quality food for every occasion, as well as very positive environmental and sustainability credentials, and we are delighted to be increasing distribution for their brand in the UK.” Tyson Foods has grown from humble beginnings in Arkansas to one of America’s great companies and a leader in the food industry. The modern, multi-national and protein-focused food company produces approximately 20% of the beef, pork and chicken in the United States in addition to its large brand portfolio. Through expansion and acquisition, Tyson Foods is now also one of the world’s largest food companies. Phil Eccleston, commercial director at Tyson Foods Europe said: “The UK independent frozen foodservice wholesale sector is an important and growing market for Tyson Foods. Our partnership with Central Foods will allow us to further expand our business and geographical coverage in an innovative way.” Central Foods is one of the UK’s leading frozen food distributors to the food service sector and currently sells to over 200 independent wholesalers, as well as larger national and regional wholesalers. The company is proud to be a catering partner across the whole food service sector, supplying to hotels, restaurants, bars, universities, schools, pubs, care homes, garden centres, leisure outlets and more. For more information, visit here .

A Japanese artist has designed a range of animal characters for a country estate near Windermere, inspired by the Lake District’s wildlife and its famous writers such as Beatrix Potter and William Wordsworth. Hideyuki Sobue, who made his home in the Lake District twenty years ago, won the commission from Wild Boar Estate to provide the new artwork for the venue. Some of the rural Lake District's most distinctive native animals are being featured and personified in his work on the project. These include a Brewhouse newt for the estate’s microbrewery, a wild cat to celebrate its whisky offering, a pheasant for its private woodland and a queen bee for its hives and honey. Other characters include squirrels, foxes, owls, and of course the eponymous wild boar itself for the estate’s new logo. Having immersed himself whole heartedly into the culture and heritage of the Lake District, Hideyuki has brought his Japanese skillset to the project, with the works of Beatrix Potter as key influences in the new artwork. His style aims to bridge east and west by sampling the rich cultural, artistic and ideological heritage of both. Hideyuki Sobue explains: “This has been an exciting project to help give Wild Boar Estate a more distinctive style, character and personality. I developed an animal portrait series following my National Trust commissioned art project, ‘A Letter to the Earth from Beatrix.’ This draws inspiration from Beatrix Potter’s remarkable creativity, particularly her beloved ‘Little Books’ featuring charming animal characters." “For this commission, I aimed to blend traditional and historical Lake District themes with a contemporary take on storytelling using memorable characters across all areas of the estate.” Hideyuki’s artwork involves a brush hatching technique using Japanese sumi ink, which was originally adopted from ancient China. It is also underpinned by a linear structure and oriented lines for each drawing, inspired by the concept of ‘disegno’, the aesthetic approach based on drawing established at the Florentine school in the early Renaissance period. Group marketing manager of English Lakes Hotels Resorts & Venues Colin Fox explains: “Hideyuki Sobue is a wonderful artist who we have known for many years. I previously commissioned him to create a logo for the Lake District Japan Forum and have followed his body of work ever since." “We really loved his Allan Bank portfolio in particular, and I felt it would work fantastically well for the Wild Boar Estate to build on our company mantra of respect, creativity and fun." “His deep understanding of the artists, poets and romantics who have been drawn to this beautiful part of the world has allowed him to develop his own unique takes on their work to inspire his own creations." “We loved the idea of these character drawings of woodland animals, and using their individual home names like squirrel’s drey, fox’s den and owl’s nest for our new room categories, signage and overall rebranding for the estate.” Hideyuki’s prestigious project commissions include ‘A Letter to the Earth from Beatrix’ held at Allan Bank, Grasmere, a homage to Beatrix Potter's creativity and enduring legacy. This was supported by the Arts Council England and the National Trust. He also received critical acclaim for his portrait of William Wordsworth, which was displayed at Rydal Mount. Pic caption: Lake District artist Hideyuki Sobue and Colin Fox from English Lakes Hotels showcase examples of the animal characters.

When cultural traditions and interpersonal relationships coincide, businesses start acting in irrational ways. The world knows that Samsung, LG, and Hyundai are based in South Korea. Relatively few outside Korea, though, grasp how massive they actually are – did you know, for example, that Samsung encompasses more than 70 “affiliated companies” involved in everything from fashion to healthcare? These three firms are among Korea’s biggest chaebol – family-owned conglomerates whose internal diversity and mass of incestuous affiliations have no precise analogue in the business culture of any other nation. The chaebol were largely responsible for pulling Korea out of poverty in the latter half of the 20th century, and they continue to exert a titanic influence over the country. This raises an interesting question: How far does the “Korean-ness” of the chaebol extend? Since we know that each one is ruled pretty much unilaterally by its founding family, how relevant are Confucian ideas about family life to understanding how chaebol behave in the business environment? Quite relevant, as we found when doing research for a paper recently published in Academy of Management Journal (JungYun Han of National Taiwan University and Andrew Shipilov, INSEAD Associate Professor of Strategy, and I wrote the paper). Applied beyond the Korean context, our findings suggest that the line separating business strategy from cultural and interpersonal influences is largely illusory. Chaebol Family Values Confucian values place men in a privileged position within families. Upon marriage, a woman separates from her own family, surrendering her inheritance along with the responsibility to care for her parents as they age. By accepting her as a bride, the husband’s family is thought to have done a “favour” for the wife’s family, which they are obligated somehow to repay. This places the wife’s family in a submissive position as the wife establishes a place for herself in the new household. Korea has arguably veered away from undiluted Confucian culture in recent years, but the conglomerate owner-families have been classed among the country’s conservative holdouts. Add to the above, the fact that chaebol owner-families often intermarry – just as business families the world over have always done, with full awareness of how such ties can boost cooperation and information exchange between companies. We wanted to determine whether marriage ties between chaebol introduced a Confucian-style dynamic whereby the “husband’s chaebol” (meaning the conglomerate owned by the husband’s family, in which the husband himself is generally a junior member) lorded it over the “wife’s chaebol”. Market Entry And Exit The mind-boggling diversity of the chaebol entails a fair amount of market-hopping. To examine how inter-chaebol marriage ties affected market entry and exit, we traced the composition of the owner-families behind Korea’s 60 biggest chaebol over the period 1987-2011, juxtaposing it with data on the chaebol’s presence in various industry markets during the same years, as reported by a leading credit agency. We also interviewed Korean executives and journalists to verify our theories. The lopsided picture that emerged would make no sense to those unfamiliar with the Confucian dynamic. We saw that the husbands’ chaebol were, after marriage, more likely to enter markets where the wives’ chaebols were already present. Far from trying to repel the invasion, the wives’ chaebols seemed to step aside and make room, despite the business threat posed by the husbands’ entrance. In addition, wives appeared to help their husbands exit markets with resources intact, whether by buying up their assets (factories, distribution networks, etc.) at non-competitive prices or by not teaming up with other firms to take advantage of the fragile state of retreating husbands’ firms. Nothing here would be particularly out of the ordinary, if there were reciprocity in these relationships. But this was emphatically not the case: The wives’ chaebol seemed timidly to refrain from entering markets where their husbands had established a foothold. In markets where both spouses were present, the wives stayed close to their husbands, letting them be the ones to exit if they chose. Our interviewees confirmed the observed gender dynamic was rooted in Confucian values. “If in-law families have some conflicts, the odds are always against the wife because she becomes a part of the husband’s family,” one said. “That’s why even when a wife’s chaebol sees some potential economic benefits from marriage [i.e. through the opportunity to enter new markets], they hesitate to exploit it.” Interpersonal 'Trojan Horses' The behaviour of the chaebol has implications for all organisations. The business world is thick with cross-organisational ties mixing the professional and the personal, as when ex-schoolmates broker a collaborative relationship between their respective firms. While such ties are unquestionably valuable, they can also be “Trojan horses” through which status hierarchies – which often have a cultural dimension – can sneak into business behaviour. For example, strategic alliances built around board interlocks can be unbalanced by a high-status board member throwing his weight around and eliciting deference from other directors. As the chaebol prove, interpersonal ties can even influence interactions between firms that directly compete with one another. Therefore, it’s always naïve to talk about business competition as something removed from its social and cultural context. About the Authors - Henrich R. Greve is a Professor of Entrepreneurship at INSEAD and the John H. Loudon Chaired Professor of International Management. He is also co-author of Network Advantage: How to Unlock Value from Your Alliances and Partnerships. This article can be read on the INSEAD website here and has been reproduced with their permission.

As family businesses passes from one generation to the next, there is the inevitability that the number of shareholders will increase. Such an issue can create a challenge for the family and the family business, not least because of the need for communication but also due to the need to manage the individual relationships within the family and with the business itself, with some family shareholders working within the business and some not. As Howard Hackney, one of the leading family business consultants in the UK explains, “there is a big difference between the creation of a business by an entrepreneur who starts out on a journey with nobody to report to and a third or fourth generation business. Put simply, the founder normally owns all the shares but after a few generations there are likely to be more shareholders and they will all have different needs and aspirations too.” Take, for example, a business that was set up by a founder that grew into a successful operation and was passed to the second generation equally prior to his death. The two brothers continued to develop the business, and were joint shareholders (50% each). Everything was fine and the brothers worked well together. In their personal lives, the brothers began families with the first having three boys and the second having one daughter. This example is actually quite common and moving on a number of years the business had continued to grow. The cousins got on well and were all brought up knowing about the family business, the opportunities it provided them as families and the benefits in terms of their lifestyles too. It was as the transition to the third generation that there were challenges and issues that had hitherto never been considered. As Howard continues, “most families face the challenge of doing the right thing by their children and want to make sure that they are fair to them all. In this example, the brothers were originally going to follow the lead from their father and provide for the passing of their shares to the next generation equally. That would have effectively resulted in the daughter owning 50% of the business and her cousins owning 16.67% of the business each. When you consider that the eldest son was working in the business as the Managing Director and the daughter was not working in the business, there were questions that arose.” This scenario is one that is obviously exacerbated as the business gets older and emotionally be difficult for families to address. There is a clear need to consider the role of the shareholder differently to that of an employee/director and there is a need for all owners to take on their role responsibly. Whilst easy to say, there are complications for the family firm when roles are so closely entwined and some family members are actively involved in the day-to-day operations as well as owning shares, whilst other family members are only shareholders. In the example above, the family met to discuss the situation and a solution was determined whereby the shares were put into trusts with each branch of the family having their shares put into a trust for them, thereby ensuring that each family branch had equal voting power. Mechanisms were also put in place to create an internal market for shares so that anyone wising to ‘cash-in’ their shares could do so according to the agreed protocols. The issue of who could on shares was also discussed and it was agreed that they could only be owned by the direct bloodline descendants of the founders, thereby protecting the family business from any issues in the future arising from divorce, civil partnerships etc. As Howard continues, “each family is different and there needs to be recognition of the family needs and wants in determining an approach for the future. Share ownership in the family firm can be a very emotive matter and by going through a process to determine the roles and responsibilities of the shareholders, and determining the role and the involvement of the family is an important process for any family in business to go through. There is no formulaic solution either, as it needs to reflect the drivers and goals of each family. What is right for one family will not work for another.” Clearly, the challenge of shareholder succession is one that needs to be addressed. Sadly, in many instances, the issue is not addressed prior to a significant event occurring, be it a serious health issue or a death in the family, a time when emotions are raw and time needs to be dedicated to dealing with the family crisis, rather than potentially fighting over who owns what and who can do what in terms of the shares in the family business. By drafting appropriate policies and communicating these to the next generation, there are ways to mitigate the risk of conflict and also preventing the family and the family business from suffering due to perceptions of unfairness due to individual shareholdings.

In-laws hold a unique position in family businesses. This may be said for both in-laws who work within the business and those who, for a variety of reasons, do not. This unique position has an impact on the family and business systems as well as the interaction between such systems. When in-laws work within the business, some questions that may arise are whether or not they form part of the family, whether they should be subject to the same treatment as family members or whether they should be treated differently. Despite this ambiguity, the study of family business thus far has failed to account directly for their role and position in the family business. Situating the in-law in the family business is an issue many families eventually face. Experiences vary as there are in-laws who are a tremendous asset to the family and the business whilst others may find it difficult to understand the central role the business plays in the family’s culture and value system. There exists a reality that should not be underrated of in-laws who choose to work in the family business and who experience the difficulties of not being treated equally to family members. They tend to work doubly hard to prove themselves yet often do not perceive that they reap the same benefits that family members do. A reason to this may be that there are many fears, not always totally unfounded, of the problems that in-laws can bring into the business and subsequently, the family. Since a main objective is to maintain harmonious relationships many look at the in-law as an additional complexity that could be avoided. It appears that many rules can be bent for family members but there are second thoughts for in-laws. Most in-laws, irrespective of whether or not they work in the business, who were not brought up in business owning families experience a culture shock. Most business-owning families have used the business as the centre of conversation for decades. If in-laws are not closely involved in the business they may feel left out. In-laws that come from a non business-owning family may lack the experience to prepare them for the dominance of the family business. Difference in values and expectations may cause marital conflicts. A business owning family’s expectations regarding holidays, free weekends or regular dinner times may lead to real strain. Sometimes in-laws may resent the influence of the business family over their lifestyles. Conflict is part of family life. Different people and different families experience conflict in differing ways. In-laws, both those who work in the family business and those who do not, may view matters differently from family members working in the business. The probability and frequency of conflict increases as the family expands. Fear of disagreements or conflicts can make families resist change as they may seek to avoid conflict at all costs. Recognising and grappling with conflict is a sign of strength and progress. The family’s skill in dealing with conflict and confidence that conflicts should be openly and directly addressed impact whether a family business experiences success or pain in the face of conflict. The possibility of divorce is one of the main demotivational factors for in-law participation. Not dealing with the possibility of divorce is unrealistic. Prenuptial agreements can create hard feelings with in-laws. Family rules and regulations are best established beforehand, as part of the family constitution, so when potential in-laws learn about such policies they are not taken personally. In-laws play a very important role in successful generational transitions. In-laws who do not directly work within the family business still play the important role of educating and socialising the next generation leaders into the family business. The way these in-laws perceive the family business and the messages they send to the next generation, both implicitly and explicitly, help to shape and mould the next generation of family business leaders. Fostering open communication is the overarching recommendation. Other recommendations are to educate in-laws about the family business, involve then in regular family meetings and establish times when discussing the family business is off limits. Some families develop a family code that spells out what behaviour is encouraged by all family members. Another recommendation is for family business owners to model strong, loving behaviour in one’s marriage. Flexible family boundaries, excellent parent-child relations, affectionate and caring siblings and the ‘match’ between in-laws’ personality and the background of the family have all been found to lead to positive in-law participation. In conclusion, the professionally managed business is inclusive and looks towards in-laws as having full participatory roles. Most often this expectation is expressed and information is shared openly. In-laws, in turn, reciprocate with loyalty, dedication and commitment. About the Author - Roberta Fenech is an occupational psychologist. She is an Associate Consultant for EMCS group and a lecturer at St Martin’s Institute of Technology.

One of the things that can never be underestimated is how much good parenting affects the future of a family business. Roberta Fenech explains more. One of the things that can never be underestimated is how much good parenting affects the future of a family business. Leadership development starts much earlier than in other businesses as a result of the overlap between the business and the family system. The nature-nurture debate also embraces this subject with a school of researchers attributing variation in leadership style to genetic factors, whilst others to environmental influences such as the individual’s exposure to different role models and early opportunities for leadership development. A combination of the two approaches is many a time sustained. Attachment theorists attribute individual differences in leadership to the early close emotional bond between parents (or the primary caregivers) and children arguing that next generation leaders will in the future apply previously learnt patterns of interaction within the family to leadership. Consistent parent responsiveness in childhood is associated with secure adults who have relatively high self-esteem and who approach their leadership role positively and express certainty of their ability to perform well. On the other hand inconsistent parent responsiveness in childhood is associated with the anxious-ambivalent adults who are preoccupied with attachment and have a low self-esteem. They may express reservations about their abilities to perform well in leadership roles. Consistent parent unavailability and non-responsiveness in childhood is associated with the avoidant adult who harbours negative expectations about their ability to perform well in the leadership role. Attachment styles may be transmitted across multiple generations within families. Parenting effects the future of family businesses as it teaches the capacity to communicate, to think outside one’s own interest, to make decisions, to seek consensus and to want fairness and justice for others. Family business is the ultimate leadership challenge because whilst the current leaders build or run the business, they also bring up their children, who are in turn, intimately involved in the future success of the business. A fundamental recommendation for current leaders in family businesses is not to neglect parenting. One may get caught up in working very hard to fulfil their own and their parents’ expectations as well as build a legacy for their children, compromising time at home and time as parents. Work habits, attitudes towards the business, values and relationships all take root in the childhood of the next generation. Parents convey values and attitudes particularly by example. Healthy attitudes towards the business spring from the enthusiasm and joy parents display in accomplishment, hard work, responsibility and sacrifice. Talking about the business and exposing young children to the business does not mean imposing the business onto the next generation, even if the children will never work in the business they will still become owners. What current leaders want is that their children become proud and interested owners who understand the value of their heritage. Exposing young children to the business will give them the real freedom to choose by making sure they have enough information on the business to make an informed decision whether to embrace it or pursue a different goal. A source of competitive advantage and a factor for success in efficiency, innovation and quality is the tacit or implicit knowledge that is transferred across generations from an early age such as are traditions, values and social networks. As the members of the next generation are introduced to the business from an early age, even if only volunteering in the summer holidays, they learn in practice what the business is about, as well as the context within which it operates. During the period when the next generation is formally part of the family business tacit knowledge of a holistic nature like strategy is learned. Tacit knowledge is also about managerial skills, social skills and negotiation skills.The expected commitment, values and perceptions of the current generation are to be shared with the next generation which should be given challenging, real life problems to solve. Risks to the transfer of knowledge across generations are related to dynamics in family relationships, a lack of valuation of each other’s opinions and also competence. Emotional factors also come into play. The difficulty to relate with the next generation as adults and no longer as children jeopardises the whole process. Family meetings give family members a reason to be together, to support one another and to share common interests. Apart from being very valuable in enhancing family relationships and communication, they are an excellent opportunity to articulate the meaning and mission of the family, to educate younger members and to plan for the future. The role of family members who do not work in the family business, such as in-laws, in shaping next generation leaders cannot be underrated. Family meetings focus on the interests of the family. Such meetings should encompass as many family members as possible including in-laws and the younger generation. Roberta Fenech is a freelance Occupational Psychologist currently reading for a PhD at the University of London

Opening up the board of directors to talent from outside the founding family prevents family dynamics from disrupting the functioning of the company. It also promotes the agility and attractiveness of the company. according to Miruna Radu-Lefebvre, holder of the “Family Entrepreneurship and Society” chair at Audencia. As Miruna explains, “According to a 2019 Global Family Index study conducted by EY, 55% of the world’s 500 largest family businesses are led by a leader from outside the family. Gone are the days when genetic heritage was a guarantee of a management position. Family businesses should be aware that in order to meet the challenges of the modern world, the recruitment of managers from outside the family is crucial to their success. However, attracting and retaining outside partners, both experienced and qualified, and able to understand the vision and values of the family, remains a constant challenge.” Governance Family businesses are especially prone to complex governance issues, much more so than other businesses. On the one hand, the family dynamic often infuses the company with strong founding values and unwavering support, which in the long term strengthens the company. On the other hand, there is often a problem, wherein the strategy, innovation, and social or environmental aspect of the company, conflicts with the need for family shareholders to be aligned with the interests of the company. As Miruna continues, “In practice, however, the business plan goes further than the family circle and extends to stakeholders: employees, customers, suppliers, consumers, etc. The role of governance is to ensure that family issues do not arise and disrupt the operation of the business.” Therefore, the success and sustainability of the family business depends on the separation of the governance of the family from that of the company. “The company governance carries the social interest of the company, its proper functioning, calling for a clear family vision, carried collectively and with a single voice by the members of the family,” explains Johan Gaulin, family business lawyer-partner at EY. The integration of non-family members into the company and its management bodies is essential during important stages in the life of the company (crisis management, transfer, external growth, international development, etc). Outside Perspective Many family businesses have opened their boards of directors to third parties outside of the family circle. In 2019, in 500 of the world’s largest family businesses, 77% of board members were not family members. As Miruna concludes, “The arrival of outside directors brings new perspectives, raises the level of debate, and above all, goes beyond considerations of issues and conflicts between family members. This is a hugely important, as strong differences or historical conflicts between directors from the family circle can create powerful obstacles to the proper functioning of the board.” “An open board of directors with member from outside the family also promotes business growth. It guarantees more credibility from stakeholders and builds trust. Backed by structured family governance and solid corporate management, this board structure also contributes to better employee loyalty. This openness also creates long-term opportunities and fuel a virtuous circle of attracting talent, allowing the company to grow and progress.”

The pandemic has ignited a recruitment crisis, leaving a UK-wide demand for workers. According to a British Chambers of Commerce (BCC) report, two-thirds of UK companies have found the talent pool dry, while in a recent survey by the Institute of Directors, 44% of UK businesses said they were encountering shortages. The issue is particularly acute in the professional services sector, with law firms posting strong earnings and looking to recruit but the limited number of candidates have so much choice. It’s vital therefore that managers really understand what drives candidates to choose a particular firm and have the right support internally from their recruitment team but also from outside executive search consultancies that know the market and their business well. We spoke to Deborah Gray, Director at Totum Partners to find out more. Understanding what drives candidates to choose a particular firm As with any recruitment programme, the business in question must understand what drives potential employees to choose a particular firm and use that as a basis for how they can attract the top talent. Not only do candidates need to know they will achieve good personal growth while at the company, but they are also looking for a company with a strong company culture both internally and externally, made up of clear values and beliefs. Equally, as a result of the pandemic, firms are increasingly having to show they have a good flexible working policy in place, with a wellbeing framework that helps safeguard employees’ health and mental wellbeing. Important too is the need to have the latest technology so candidates can be confident they will have all the right tools to do their job, as well as clear policies and, more importantly, activity to demonstrate the firm’s positive social impact. Harnessing internal resources As Deborah adds, “With swathes of companies struggling to plug the skills gap, it is no surprise that hiring managers are looking at alternative ways to entice the right talent. Referral schemes are certainly becoming more popular. These help to provide suitable candidates who come with endorsement from employees and industry professionals, in exchange for monetary reward or other incentives.” “Also, companies are putting more emphasis on internal training and highlighting the opportunities for progression, which play a vital role in employee retention and attraction. According to a study by Willis Towers Watson, 70% of ‘high-retention-risk’ employees want to leave because they see no future advancement in their current job, so it is incredibly important to ensure your employees feel valued and have clear progression goals.” Partner with outside search consultants Given it is such a tough hiring market companies have also been partnering with good quality external recruitment and executive search consultancies, which have the sector, candidate knowledge and expertise to help. Good consultancies develop deep and long-term relationships with their clients to ensure they have a strong understanding of the sector, but also of the business’ recruitment requirements. In an ideal scenario, the consultancy becomes an extended arm of the company they are working with, allowing them to offer a very tailored service. Recruitment consultancies will often have access to larger pools of potential talent and know where to look in search of highly qualified candidates. With a deep understanding of their clients’ needs consultancies are able to provide small numbers of candidates who are closely matched to the clients’ requirements. As Deborah explains, “With diverse workforces outperforming those with limited diversity by as much as 48%, we at Totum believe in sourcing from a broad and diverse pool of talent, to find the right fit for our clients.” “Also, with a constant presence in particular job markets, recruitment consultancies have the knowledge to provide specific advice on salaries, bonus structures and more, and will know exactly how to tailor an offer to attract the very best talent.” Right approach is key Often, the best way to develop a well thought out recruitment strategy is to include a variety of methods, which complement each other to help give best results. However, at the heart of any approach should be the human element. It seems so simple, but many companies fall short when they are trying to recruit the best candidates. It is so important that recruitment processes are efficient and that candidates are treated well at every touchpoint they have with a company. As Deborah concludes, “In a market that is so competitive and where candidates have a great deal of choice, a business that goes over and above to make them feel wanted, whether it be a call from the CEO, or a lunch with the hiring manager, will be the ones that are chosen. It is the human touches that companies should consider having as integral to their recruitment process.” “At bottom, if the recruitment industry is anything it is a human business, and in such a competitive market companies would do well to remember this.”

Employees who find their job meaningful increase the likelihood of better performance reviews by suggesting ways of improvement for their companies, new research from Trinity Business School has revealed. According to the study, undertaken by Amanda Shantz, Associate Professor and MBA Director at Trinity Business School, Trinity College Dublin, finding your work meaningful increases the likelihood of receiving a better performance review because it improves your ‘promotive voice behaviour.’ Promotive voice behaviour refers to when employees offer suggestions around how their organisation can improve the way it functions. Together with her colleagues Nils Fürstenberg and Kerstin Alfes of ESCP Berlin, Shantz found that the relationship between job meaningfulness and promotive voice behaviour was strongest when employees had a high-quality relationship with their boss. In undertaking the study, Shantz and her colleagues used data from 249 employees at a UK-based construction and consultancy firm. The employees’ roles varied, and included positions in facilities management, logistics, building, property development, and administrative roles. Each employee taking part in the study was asked to fill out a questionnaire, which was later analysed against performance reviews from their supervisor. The study makes significant contributions to discussions around the relationship between meaningfulness of work and job performance, providing much-needed evidence of the existence of this positive relationship. It also highlights the role of the employee-supervisor working relationship as a mediator in this. Amanda Shantz, Associate Professor and MBA Director at Trinity Business School, says: “Cultivating an environment in which employees find purpose in their work goes beyond a ‘feel good factor’; employees who find their work meaningful are more likely to offer constructive and innovative ideas, thereby increasing their work performance and ultimately contributing to organisational effectiveness.” The paper, Meaningfulness of work and supervisory‐rated job performance: A moderated‐mediation model, was published in the journal, Human Resource Management. Find out more here