Maison Bernard has been a family-run business since 1868. Currently managed by father and son Jan and Matthijs Strick, it has been based in Brussels since 1986 and claims to be the oldest violin workshop in Europe. Recently they triumphed in the global PFV Prize for Family Business. Watch this short video to gain an appreciation of their craft.

A nuptial agreement can be a useful tool for wealthy individuals and families who seek to preserve wealth for future generations. Here, Joanne Edwards, Head of Family Law at Forsters shares her insights. The Risks Wealth protection strategies are devised to reduce the risk of wealth being dissipated or lost, and to mitigate any risks that can be identified. For example, the risk of currency fluctuation can be mitigated by hedging, the risk of losing key personnel can be mitigated by life insurance, and the risk of incurring unnecessary tax can be reduced by careful structuring. Divorce can pose a significant risk to a family or individual’s wealth. Recent publicity suggests that Amazon founder Jeff Bezos will pay his wife MacKenzie Bezos in the region of $35 billion, following the breakdown of their 25-year marriage. Multi-million pound divorce settlements are far from uncommon in England: not for nothing is London referred to as the “divorce capital of the world”. For a family seeking to ensure that wealth is preserved for future generations, a divorce can be hugely expensive and disruptive. The emotional toll on all concerned is well-known. Legal fees can be significant. The cost of the settlement can significantly deplete the family finances. But there are other, hidden, costs: a protracted divorce can lead to business paralysis. Injunctions may be granted, severely curtailing business operations. Trusts, family businesses and trusted advisers may be required to disclose documents or even joined as parties to the proceedings. The most hard-fought divorce cases may last for two or three years, causing significant disruption. The Role Of Nuptial Agreements A nuptial agreement can reduce or mitigate these risks. A common perception of nuptial agreements is that they are designed to limit the extent of one party’s financial claims. Whilst they can be used in that way, their greater utility in this context is their ability to reduce uncertainty, and therefore risk. Jurisdiction Wealthy families are increasingly mobile, and many will have connections with several countries. A great deal of thought may have been given to where individual family members reside, where they are domiciled, and where assets and structures are located. The rules regarding jurisdiction for divorce are complex, and vary from country to country. It is highly likely, however, that a party seeking a divorce will have a choice of jurisdictions, and that choice can hugely affect the size of the likely award, as well as the likelihood that payment of any sums due under the award can be enforced. The practice of “shopping” for the most favourable jurisdiction is well established, and can lead to protracted litigation in multiple jurisdictions. A nuptial agreement can fix jurisdiction in one state. Alternatively, it can be drafted so as to be effective in each state that may have jurisdiction. A well-drafted nuptial agreement can significantly reduce the risk of jurisdiction shopping. Asset Definition A nuptial agreement will typically define which assets form part of each party’s separate property, and which constitute joint property. The agreement will then establish rules for how the different classes of assets are to be divided in the event of divorce. The rules may be very broad, or very detailed. A well-drafted nuptial agreement can provide certainty about the extent of the parties’ assets, and how they are to be divided in the event of divorce. Wealth Preservation A nuptial agreement can ensure that fair provision is made for the economically weaker party on divorce, whilst nonetheless preserving family wealth for future generations. For instance, a home can be settled subject to a life interest, rather than by outright transfer, or a separate structure can be established from which maintenance is paid during the recipient’s lifetime, with the structure later reverting to family ownership. Predictable Outcome A nuptial agreement should provide a couple, and their wider families, with certainty about the financial consequences of divorce. A nuptial agreement is likely to be upheld by the English court, provided both parties had disclosure of the other’s wealth, and had independent legal advice about the consequences of entering into the agreement. The agreement must also make fair provision for the economically weaker party, and neither party must feel unduly pressurised to sign the agreement. Provided those criteria are met, the parties can be reasonably certain that the agreement will be upheld. This greatly reduces the likelihood of costly and time-consuming and expensive litigation, if the marriage does break down. Existing Structures A nuptial agreement should be drafted with existing asset structures in mind. For instance, the agreement should set out the mechanism whereby trustees are to be requested to assist in the event of divorce. Equally important is that existing structures are “stress-tested” to ensure they are sufficiently robust if they are challenged in the event of divorce. As specialist family lawyers, we have extensive experience of the way in which the family courts approach complex structures, and will be able to advise what steps should be taken to reduce or mitigate risk. Nuptial Agreements And Family Culture Family dynamics can be complex. It is rarely easy for one family member to suggest to another that they should obtain a nuptial agreement. Trusted advisers have a key role in ensuring that nuptial agreements are discussed, and the advantages are understood. Older generations can encourage future generations to enter into nuptial agreements by making it clear in letters of wishes that trustees are to look more favourably on those who have done so. Similarly, family constitutions can be drafted so as to confirm an expectation that family members wishing to share in the family wealth are expected to enter into nuptial agreements. Nuptial agreements are an essential tool for wealth planning. About the Author - Jo is the Head of Family Law at Forsters and specialises in dealing with issues which arise on relationship breakdown, including the financial consequences of divorce or separation; and resolving arrangements for children, including cases involving relocation with children. She also has expertise in advising on pre-nuptial agreements and acting in cases involving unmarried couples. Although Jo has extensive experience of taking cases to court where required, she is known for her conciliatory, pragmatic approach and desire to settle cases where possible.

Just over a year ago in February 2020, family business Bradfords Bakers and sister companies Send Them Cupcakes and Send Them Balloons operated from one location near Glasgow, in Scotland. There were six full time staff members, who baked and hand-decorated cupcakes, inflated and boxed balloons, and arranged a selection of gift hampers. They prepared between seventy and eighty gifts for delivery every day, which were collected by a courier in the evening, set to arrive to their recipients the next day. Bradfords Bakers was first founded in 1924 by Hugh Bradford and his sons. For years, the business had just one premises that would move around every few years to different Glasgow locations. Small staff teams kept the bakery going, serving bread and gateaux to the locale. Later in the 20th century, the business saw massive expansion as multiple locations were opened. In the new millennium, focus was placed on innovation such as in 2006 when the online branch of the bakery was founded, enabling the bakery to service consumers nationwide. In 2012, Bradfords Bakers created the Bakery ATM, which was a vending machine that provided freshly baked and decorated cupcakes to anyone who crossed its path in Glasgow’s St Enoch’s Centre. Unfortunately, the company was hit hard by 2008’s banking crisis which led to its stores starting to close. Bradfords Bakers, then 88 years old as a company, proved resilient and manoeuvred to fall back on its online branch. In 2013, the last Bradfords Bakers bricks-and-mortar store closed on a Friday, and it was fully active in its new and current form the following Tuesday. Now, it is managed by fourth generation Bradford, Claire, along with her husband James McGoldrick. In 2014 they founded Send Them Balloons and Send Them Cupcakes, aiming simply to reach new customers by telling them they deliver balloons and cupcakes. This came from evolution; as an e-commerce company, Bradfords Bakers was no longer the bakery it once was. It shifted to a gift company that was recognised for its hampers. So, James and Claire decided to spotlight their other offerings with their own small businesses. Less than a hundred orders fulfilled by six people feels like a distant memory now, even though it was only a year ago: everything has changed dramatically since lockdowns and travel restrictions rolled out across the UK. When non-essential shops as well as pubs, cafés and restaurants closed, the demand for Bradfords Bakers services skyrocketed, as did the need for its sister companies. Consumers were unable to visit the high street shops where they would buy gifts for the likes of birthdays, graduations, engagements, and other occasions; additionally, they couldn’t travel to give the gift either. So, Bradfords Bakers fitted well as a replacement as it delivered gifts directly to their recipients. As boredom set in while restrictions persisted, people became hungry for the experiences they were missing out on from the outside world. Afternoon teas catapulted straight to the top of the list of most popular offerings for the bakery, as customers could allow their own imaginations to set the limits for their days in: with an afternoon tea, they could create a fun and unique day in for the family, or a midday date. As such, Bradfords Bakers, Send Them Cupcakes, and Send Them Balloons saw massive growth. The family-owned business is currently operating at 350% and has seen incredible increases in conversion across different groups of customers. In 55–64-year-olds, there has been an increase in conversion of 180%, and 20% in those aged 64 and older. James recognises that this change has taken place as consumers have had to adjust to online shopping, where they may have been reticent to do so before lockdowns. This increase in growth and orders has allowed James and Claire to double their full-time staff size from six to 12; this manpower was needed to meet the demand they were facing. Now, even on quiet days, everyone onsite is kept busy as the average number of orders received on a given day has more than doubled; now they prepare up to 200 gifts for delivery each day. Fast forward to March 2021 and 200 orders per day is merely the calm before the storm; as national holidays like Valentine’s Day and Mother’s Day approach, the business goes into overdrive to meet the massively increased level of demand they receive. In the three days before Mother’s Day 2021, Bradfords Bakers, Send Them Balloons, and Send Them Cupcakes prepared nearly 2,000 gifts for nationwide delivery. Today Bradfords Bakers employs 12 staff members, but not all are there to bake and decorate cakes or blow-up balloons – James oversees the upstairs office where he manages any corporate orders, their customer helpdesk and anything else that keeps the company afloat. With him is the Bradfords Bakers customer services manager, Megan, and public relations executive, Holly. When the company is as busy as it was before Mother’s Day, it’s all hands-on deck: James and Holly will put aside their regular work to head downstairs and help with the orders that need to go out. Megan will also lend her time but prioritises her communications with their customers to make sure their needs are met, and queries are answered. The staff, who are one team, will work together, staying on late to make sure all the gifts are sent for delivery in a timely manner, and to prepare whatever they can for the next day, as to get a head start. It ends up being a great opportunity to unite the staff members who usually don’t get to see each other often; as they prepare hampers and box cupcakes, they get to catch up and share a laugh. Through this pandemic, while so many of us have been kept separate from our families and friends, this human connection has been vital and endlessly valuable. Busy times like these are ultimately difficult; it means a whole day of rushing about, being on your feet, working hard to make sure no one is disappointed. James places importance the birthdays and other occasions they help their customers celebrate – so many gifts now are being ordered by the likes of grandparents to grandchildren and vice versa. He and his staff are happy to know that they are doing something to ease the stress and tension everyone is going through while lockdowns are still in place. Ahead of these holidays, when the business is as busy as it gets, James and Claire must turn the online store off at a certain point as they reach capacity for orders – so many come in, and at a certain point, they have to start turning customers away. Ordering in advance is vital when pursuing a Bradfords Bakers, Send Them Cupcakes, or Send Them Balloons gift as they regularly experience a massive increase in volume ahead of holidays. This level of chaos isn’t reserved purely for holidays: Bradfords Bakers welcome large corporate orders and did so ahead of Christmas from different employers who wanted to send their employees festive hampers. They wanted to do this to say thank you for a years’ hard work during lockdown. Although the bakery was already extremely busy before the holiday, James and Claire noted that Christmas 2020 was probably the most wildly different Christmas most people had ever experienced. So, they and their staff accepted that they would be working hard through the season to ensure that their customers all over the UK were cheered by gifts. The pandemic has brought challenges for the businesses as they’ve had to drastically change the way they operate to meet the new volume of orders being received, but James and Claire are grateful for the security that comes with such high demand. As restrictions begin to ease and lockdowns are lifted, staff are looking forward to experiencing some normality in their personal lives. Still, James and Claire implore consumers nationwide not to forget the e-commerce businesses that got them through the stresses and boredoms of lockdowns; the ones who provided some fun and excitement when nothing else was available. With the continued support of their customers, Bradfords Bakers, Send Them Balloons, and Send Them Cupcakes hopes to see continued growth, and hope to use any downtime for new product development and further innovation.

Mark Boddington is the founder and chairman of Silverlining Furniture – one of furniture making’s leading names recognised for its progressive design ethos and focus on combining time-honoured craftsmanship techniques with the latest technologies. Boddington is also the great-great-grandson of the famous founder of Boddingtons English Beer – Henry Boddington, but it’s his love for furniture-making that’s guided his career choices. Boddington quotes his moher as one of his mentors – she had a natural flair for the arts and crafts, which also ran in the family through generations. Her grandfather, George Rae, was well-known for his patronage of the Pre- Raphaelite Brotherhood and his commissioning and acquisition of works, including Rosetti’s The Beloved, commissioned in 1863 for £300. It was Boddington’s mother who, when he decided against a career in brewery management, encouraged him to follow his heart as the craftsperson. It led Boddington to undertake training with the celebrated furniture-maker, John Makepeace and under his mentorship, tirelessly hone his skills. A successful graduate show at which Boddington took £38,000 worth of orders, enabled him to set up his first workshop at the age of 21. Boddington quotes two lucky breaks that helped him in the early stages of his career. His first workshop was on the Grosvenor Estate in Cheshire, home to the Duchess and the late Duke of Westminster, where he met the couple’s interior designer John Stefanidis. The relationship resulted in a steady flow of commissions from Eaton Hall and international aristocratic families. The second lucky break came in 1993 onboard a plane from Miami to LA when Boddington encountered Kevin Costner’s architect. This relationship led to a stream of commissions from Hollywood from clients such as David Bowie, Madonna, and Tom Ford. Now that Silverlining has a 62-strong team and loyal clientele across the globe, Boddington has turned his passion to developing the company and investing in his team. He also has on his mind the legacy he’ll leave behind. He envisions growing the business to feature a furniture-making academy and a new workshop facility. His other dream is to have an on-site restaurant, a nod to his mother’s passion for cooking and his love for growing organic produce, especially rare vegetables. Find out more here

Our family business friends in Northern Ireland at Environmental Street Furniture (‘ESF’) have released a corporate video, showcasing their products and proudly shouting about being a family business too. As Alan Lowry, Managing Director at ESF explains, “Over lockdown we have taken the opportunity to rebrand the company to really highlight all that we do. As part of this process we have produced our first corporate video, showcasing the amazing projects we have been delivering both locally and globally.” “It has been a real challenge with travel restrictions and Covid regulations, but it is completed and we are delighted to share it with you today. We hope you will enjoy watching this video and learning more about ESF.”

Family businesses are recognised the world over as a force for good and whilst they are not always the first to shout about their activities, many such as the Matthew Good Foundation (‘MGF’) continue to be active and quietly do some good and make a real difference. Paul Andrews spoke to Tim Good and Michelle Taft to find out more. So how did it all come about? As Tim explained, “My Dad sat down with Matt who was Managing Director at the time and I and explained that we were going to inherit the business in due course and asked us what our plans were for the future. Matt wanted to continue to grow the business for future generations and I wanted to explore the creation of a foundation, funded by the family business.” Plans were well underway to create the foundation, originally as the John Good Foundation, ready for launch later in 2011. As Tim continues, “Sadly and very unexpectedly Matt died whilst running a marathon for charity. He was the 6th generation to work in our family company John Good Group, which has been in business for over 185 years and is still family owned.” “This had a real impact on all of us. It was obvious that the name had to change and subsequently The Matthew Good Foundation was created and launched.” The initial plans involved money being put into the Foundation which was added to by staff members raising funds and then it was down to the employees to determine where the funds would be used. The underlying principles of the Foundation were to support causes and charities on behalf of our members, staff in the business, the trustees of the foundation and the shareholders. In preparing for the new Foundation Tim undertook a course at the Institute of Philanthropy and this lead to the creation of, at the time, some innovative approaches that the Foundation would take. These core tenets of the Foundation have evolved and today are represented by: 1. Grants for Good – their first fund that invites charities, community interest companies and social entrepreneurs to apply to the Foundation directly for funding. 2. Double Match – members and their immediate family members can apply for up to £2,000 in double match funding when they raise funds for charity. 3. Donation Matching – for members that choose to donate their own money to charity, they match their charitable donations up to a maximum value of £2,000. 4. Championing – members can nominate small charities or local initiatives to receive a Championing Grant up to £500; or £1,000 if they volunteer for the cause. 5. Grass Roots Funding – a grassroots application allows members to directly support an issue, cause or project that they are passionate about by starting their own project. The structure of the Foundation is simply and effectively managed too with one member of staff in each of their regional offices responsible for championing the Foundation and engaging with employees, reviewing and approving applications and uploading them to a central management platform. Over the years the Foundation has grown and funds donated by a share of profits from the family business. In 2019, Michelle, who had already been working with the core family business in a marketing and communications role, was recruited to develop and grow the Foundation. Clearly, already appreciating the underlying values of the family firm, she made an impact straight away. As she explains, “This is a great opportunity because there is such a lot going on. As a Foundation we predominantly work in the UK with small local charities and good causes. However, we are also involved in a number of international projects including the Philippines, Honduras, India and Africa.” “This family business recognises it has a responsibility to both society and to the environment in which it works and philanthropy is an integral part of our family values & purpose too.” For Tim, the role of the Foundation is important in a number of ways. As he explains, “The Matthew Good Foundation is important me for Matt, in terms of his legacy for sure, but also as it was something that we were working on together before he passed away. It was important to see it through and today it is great to see the impact that it is already having too.” “There is also a tangible edge to the Foundation too. As good corporate citizens of a family firm that employs 350 staff and has been in operation for over 188 years, we have a duty to run the business properly and Corporate Social Responsibility, Governance and Philanthropy all have a role to play in doing so. Having the Foundation is another dimension as this is not a formal requirement but something that we want to do and have actually set out as a plan to undertake,” continues Tim. “Over time, our long-term intentions are to build up the Foundation and create an endowment that would enable it to become entirely financially sustainable, forever, and continue the work that has already been started. It would then become a real force for good in its own right, irrespective of what the future holds for the family business,” he adds. At the time of the conversation with his Dad when the concept was just an idea, Tim had a vision to go off and run his own business and an ambition to move into the philanthropic world and as time has gone by, this dream has certainly become a reality. The Foundation was created to support John Good Group employees in making a difference to good causes close to their hearts. Since 2011, they have made a major impact supporting good causes in the UK and abroad. £470,000 donated since 2011 £85,000 donated in 2020 Staff engaged 300 causes supported This is a Foundation that has quietly over the years made a difference to the causes and charities that have been supported and for Tim and Michelle there have been a number of key projects that have really resonated with the values and aims underlying its creation. As Tim explains, “For me, being involved in the project that helped to create the International Institute of Race Medicine was a key milestone. Matt passed away whilst running a marathon and this organisation, supported by the leading marathon races across the world, has created a book of best practice to help all race organisers take steps to help preventable deaths during races. It makes a massive difference by collaborating and sharing best practice and will be a key part of Matt’s legacy too.” As Michelle adds, “We also got involved with a project in India that involved visiting and creating a film about the impact of the innovative work that they were doing. It made a major impact in terms of establishing their credibility as an organisation, showcasing what they do, and as well as raising their profile and endeavours to make a difference, they have already benefitted with significant donations too.” Tim agrees and adds, “It is not just about the major projects or key milestones as we need to recognise the broader impact. We have opened up the world of philanthropy to people that would never have thought they could be involved – a number of our staff have become philanthropists and continue to make an impact on society through their engagement with the Foundation and that is great to see. And what about the future? Family firms are genuinely interested in their stakeholders and the communities in which they operate and many have been supporting projects and causes for many years. Many quietly go about just doing their bit. Through the work of the Foundation Tim appreciates that there are opportunities for them to share what they have learned with others and there is now a real desire to move things up a level. As Tim explains, “We have the knowledge that others can benefit from and we are considering a number of projects to pool resources, collaborate with other foundations and to share best practice, helping others to get involved more and to learn from others. There is plenty of scope for us to help smaller charities and causes through marketing and communication too. We have lots of ideas and really do want to help others where we can.” We look forward to seeing the continuing impact of the Mathew Good Foundation and their plans for the future. They have created a fantastic legacy for Matt and a Foundation that continues to build on their collective plans back when it was just an idea. This is one enterprising charitable trust funded by a British family business making an impact at home and abroad. It is great to see family firms embracing their role in society and making a real difference and this is one legacy that really does look set to continue long into the future. www.matthewgoodfoundation.org

In this article, Daniel Ugur of Forsters takes a look at a practical checklist for the post-Covid world and the need for structures to be ‘digital ready.’ The Covid-19 pandemic has had two major implications for family governance structures: Short-term : travel restrictions and health risks have prevented ‘business as normal’ for the foreseeable future. Long-term : in some cases the increasing use of digital communication by families and their professional advisors is causing disruption to governance structures. Digital forms of communication (such as video conferencing) are here to stay. Families therefore need to adopt appropriate policies and incorporate them into their governance structures. Accordingly, families need short-term fixes to their structures, but should also ensure their structures are ‘digital ready’ to ensure they work over the long-term. Without these fixes, structures could face paralysis with disastrous effects for family businesses and private assets. The considerations in this note apply equally to new and existing structures. Checklist Here are the points that family councils now need to consider with their legal advisers. Formulate digital policies : families need to formulate policies on digital communication. Is the family prepared to embrace (or tolerate) digital communication, or does it frustrate the family ethos? Identify immediate defects : families and their lawyers need to identify defects which require immediate changes. For example, what if board or protector meetings are premised on physical meetings, which cannot currently take place? Some structures may already be in breach, or be unable to function. Detailed re-drafting : core rules on voting and meetings should be reconsidered. The sorts of questions now arising include: In what circumstances can/should governance be conducted digitally? Prohibition on digital? Should some families prohibit virtual meetings altogether? If so, what should happen in Covid-like situations? Do the rules allow for decisions to be made virtually and what are the digital voting procedures? Should certain decisions be reserved for physical meetings? For instance, the types of decision which require detailed discussion. Should certain decisions be digital? For example, should virtual meetings be encouraged for certain business decisions which require quick action? Psychology and family interactions. Families need to consider how they can successfully interact digitally and how board members can “read the room” in the absence of body language. Facial expressions become the only means of gauging reactions, which itself is contingent on a reliable internet connection. Should these factors shape decision-making processes? It may depend on the nature and size of the family. Original documents. Access to the trust documents themselves may be critical: are they always accessible? Tax : how to mitigate the risk of bringing structures onshore when dealing digitally (especially if trustees are grounded onshore in crisis situations). Re-evaluating core provisions : the current crisis highlights the ongoing importance of reviewing several core provisions. Exit strategies – the current situation may put strain on families who cannot meet, particularly if unresolved issues are allowed to “fester”. Equally, it will put strain on asset values, if family businesses and private assets lose value in the current market. This reinforces the importance of exit provisions for those families that permit exits. If family members wish to exit, there must be rules to govern how (and whether) this can be done. Capacity issues – the pandemic is a reminder to check structures have thorough provisions for incapacity, whether temporary or permanent. Importance of board appointments – the boards of many family entities are now dealing with the economic fallout from the pandemic. In some cases, survival will depend on the actions of board members. This underlines the importance of making the right board appointments and ensuring there are effective successor appointment provisions. Investment advisors and protectors : similarly, the current challenges show the importance of effective provisions for investment advisors/committees and protectors. Flee clauses : flee clauses automatically trigger certain actions (such as transfers of trusteeship) upon crisis situations. Should flee clauses be activated in the event of a future pandemic or similar emergency, to ensure effective governance? If so, how would the new jurisdiction be determined? Equally, how are “trigger events” defined and would a pandemic unwittingly activate a flee clause? Regulation : economic substance rules require physical presence in the jurisdiction where the structure is incorporated. Structures need to ensure compliance when operating digitally. Confidential information : trustees and other fiduciaries owe duties of confidentiality under statute and common law. Measures are needed to ensure compliance when, for example, conducting video conferences and arranging electronic signatures. In many cases, patriarchs and matriarchs will strongly advocate the status quo on matters such as physical meetings, and for most families this should remain the default option. However, it can no longer be assumed that structures can always run on the traditional basis. Structures therefore need to be reviewed to ensure they are ‘digital ready.’ You can download and print a pdf copy of this article below:

2020 highlighted the need for digital transformation around the world and in every sector with family businesses that had invested in IT infrastructure being able to keep working when their countries went into lockdown. Companies that hadn’t were left scrambling. Mandatory remote work has proven that digital transformation has very real business benefits. It isn’t a load of buzzwords and IT fads. Companies that hadn’t invested in it in the past are almost certainly doing so right now. However, the latest research from Vistage found that despite seeing the need for digital transformation, leaders aren’t always confident they can make it happen: 32% said they don’t feel confident about their ability to lead digital transformation projects, compared to 21% that said they do 38% said their business wasn’t ready to embrace it, compared to 26% that said it was 35% said their business model wasn’t ready, compared to 28% that felt it was So how can non-technical leaders take ownership of digital transformation and drive it forward? In this guide, the team at Vistage share tips and advice that will help any leader make digital transformation happen in their organisation. How to lead digital transformation projects with total confidence – even if you don’t have a technical background. Read the guide below to find out more and visit the Vistage website to see how they work with business leaders ON their business too. Download and read the guide below:

2020 was undoubtedly a difficult year for many business and in a year where business has had to transform the way it meets the needs of society and the environment, family owned businesses risk falling behind, according to a new global survey of 2,801 family business owners. While more than half (55%) of respondents saw the potential for their business to lead on sustainability, only 37% have a defined strategy in place. European and American businesses are lagging their Asian counterparts in their commitment to prioritising sustainability in their strategy. 79% of respondents in mainland China and 78% in Japan reported ‘putting sustainability at the heart of everything we do’ compared to 23% of US and 39% in the UK. Larger businesses and those owned by later generations also buck the trend, with greater focus on sustainability. This reluctance to embrace sustainability comes despite the fact family owned businesses are highly likely to see a responsibility to society. Over 80% engage in proactive social responsibility activity, and 71% sought to retain as many staff as possible during the pandemic. Nor is it a function of economic pessimism – less than half (46%) expect sales to fall despite the pandemic and survey respondents felt optimistic about their business’ abilities to withstand and continue to grow in 2021 and 2022. Instead, the issue is an increasingly out-of-date conception of how businesses should respond to society, with 76% in the US and 60% in the UK placing greater emphasis on their direct contribution, often through philanthropic initiatives, rather than through a strategic approach to ESG matters. Family businesses are also somewhat insulated from the investor pressure that is currently pushing public companies to put ESG at the heart of their long term plans for commercial success. Peter Englisch, global family business leader at PwC says, “It is clear that family businesses globally have a strong commitment to a wider social purpose. But there is a growing pressure from customers, lenders, shareholders and even employees, to demonstrate a meaningful impact around sustainability and wider ESG issues. Many listed companies have started to respond but this survey indicates that family businesses have a more traditional approach to social contribution.” “Family businesses must adapt to changing expectations and, by failing to do so, are creating a potential business risk. This is not just about stating a commitment to doing good, but setting meaningful targets and reporting that demonstrate a clear sense of their values and purpose when it comes to helping economies and societies build back better.” Growth The survey suggests family businesses have weathered the pandemic relatively well. Less than half (46%) expect sales to fall despite the pandemic and survey respondents felt optimistic about their business’ abilities to withstand and continue to grow in 2021 and 2022. Digital Transformation Even though 80% of family businesses adapted to the challenges of the COVID-19 pandemic by enabling home working for employees, there are also concerns about their overall strength when it comes to digital transformation. 62% of respondents described their digital capabilities as ‘not strong,’ with a further 19% describing it as a work in progress. Yet here there are clear generational differences: 41% of businesses that describe themselves as digitally strong are 3rd or 4th generation, and Next Gens have taken an increased role in 46% of digitally strong businesses. Peter Englisch adds that “It is a concern that family businesses are lagging behind the curve. There is clear evidence that having strong digital capabilities enables agility and success and that they have a similar enthusiasm for sustainability.” “Businesses should consider how they can engage the experience and fresh insight of Next Gens when it comes to prioritising their digital journey.” The Governance Gap While family businesses report good levels of trust, transparency and communication, the survey highlights the benefits of a professional governance structure. While 79% say they have some form of governance procedure or policy in place, the figures fall dramatically when it comes to important areas: just over a quarter state they have a family constitution or protocol, while only 15% have established conflict resolution mechanisms. Peter Englisch continues saying that “Family harmony should never be taken for granted – it’s something that must be worked on and planned for, with the same focus and professionalism that’s applied to business strategy and operational decisions.” “There are growing concerns from regulators around the world about family business succession, especially with a third of 1st, 2nd or 3rd generation businesses expecting the next generation to become majority shareholders in the next five years.” “It is therefore vitally important that businesses take a lead on ensuring they have formal processes in place they can ensure stability and continuity in the long run,” concludes Peter. Download and read the full research report here:

Given their portrayals in the media, it might be easy to dismiss family businesses as hotbeds of power playing, favour currying, and back-stabbing—preoccupations that can hurt the company, the family, or both. Think of the Murdochs and NewsCorp, or the Redstones and National Amusements, to name just two. But despite the headline-grabbing tales, many family businesses have enjoyed success for decades, even centuries. For instance, the Italian winemaker Marchesi Antinori, established in 1385, has thrived as a family business for more than 600 years. Similar examples can be found across the globe just within the alcohol business; they include Gekkeikan in Japan (founded in 1637), Berry Bros & Rudd in the United Kingdom (1698), and Jose Cuervo in Mexico (1795). So which is it? Are family businesses prone to dramatic implosions, or are they some of the most enduring companies in existence? The answer is both. They can be much more fragile or much more resilient than their peers. Given that family businesses—companies in which two or more family members exercise control, concurrently or sequentially—represent an estimated 85% of the world’s companies, ensuring their longevity is essential. The United States alone has 5.5 million of these businesses, which employ 62% of the workforce, according to the research and advocacy group Family Enterprise USA. To explain the difference between those two fates, we’ll delve into an area rarely explored in business schools or the media: the impact of ownership on a company’s long-term success. Ownership of any asset confers the power to fundamentally shape it. Think of a professional sports team. Within the rules of the league, the owner has the right to make essentially every important decision, including whether to fire the coach, which players are on the roster, where the team plays, whether the franchise seeks to maximize wins or profits, and whether and when to sell it. The teams with the best track records have great owners at the helm. If your favourite team has an ineffective owner, you are probably doomed to disappointment. The owners of family businesses wield profound decision-making power. We know of sizable companies in which not a dollar can be spent without their approval. In a widely held public company, the owners are mostly investors. Their influence is limited. They typically let the board and management run the business; when dissatisfied, they “vote with their feet” by selling their shares. Ownership of a family business could not be more different. It rests with a relatively small number of people, who are related. Their ability to shape the company is profound and is itself shaped by their relationships with one another. That’s a potent mix, creating the extraordinary highs and lows we see daily in our work advising the owners of family businesses. Five core rights accompany family ownership—the right to: Design: What type of ownership do you want? Decide: How will you structure governance? Value: How will you define success? Inform: What will—and won’t—you communicate? Transfer: How will you handle the transition to the next generation? Understanding and effectively exercising these rights can lead to long-term success. Misunderstanding or misapplying them can destroy what a family has spent generations building. In this article we explore the five rights and offer battle-tested approaches for exercising them well. What Type of Ownership Do You Want? Family businesses are often lumped together as if they were all the same. But four fundamentally different types exist, distinguished by who can be an owner and how owners share control. If you want your family business to last for generations, you need to understand the characteristics of your type and the strengths and challenges associated with it. The choice of ownership type isn’t a mere legal formality; it can define or restrict various members’ involvement and may loom as an unrecognized source of conflict. Sole owner. One family member owns the company and is responsible for all decisions. This works best when the business requires decisive leadership and creates enough liquidity to satisfy nonowners (or when non-business assets can do so). The French cognac maker House of Camus has had a sole owner since its founding, in 1863. In each generation, one member leads the company, buying out siblings’ shares. The current owner, Cyril Camus, says this model has been essential to the firm’s longevity. With no siblings or cousins involved, family conflict around the business is rare. Sole ownership has downsides: Succession becomes a central issue, which may be decided according to merit (as assessed by the current owner) or assigned by primogeniture or a similar rule, and the owner must wrestle with what benefits to extend to other family members. This model can be risky, because much of the family’s capital and talent exit in each generation. Partnership. Ownership is restricted to family members actively working in the business. This allows for multiple perspectives and requires clear rules governing how people can join or leave the ownership group and what benefits accrue to nonowners. The German-Dutch Brenninkmeijer family, sixth-generation owners of the clothing chain C&A, have chosen this type. Children of current owners are admitted to the partnership on a competitive basis, after a rigorous evaluation and an apprenticeship. Like sole ownerships, partnerships keep family owners highly engaged but can be vulnerable to the loss of capital and talent. They are typically more resilient because they don’t rely on just one leader, but they may face conflict over who is admitted to ownership. Distributed ownership . Any family member may be an owner and participate in decision-making. This works well when most of the family wealth resides in the company, when it is mandated by law, or when it is expected by family culture. The Brazil-based conglomerate Votorantim has this type of ownership: In each generation, family members pass down their shares, usually evenly. With no need to buy out nonowner members, distributed ownership can keep family capital tied to the business. But owners may vary in engagement; aligning their interests and defining decision-making norms can be challenging, and resentment about “free riders” may arise if some are operating the business while others are “only” investors. Big problems may crop up if some members of the family want to cash out; having a clearly defined exit ramp reduces that risk. Concentrated ownership. Any family member may be an owner, but a subset controls decision-making. This works well when decisive action is required despite a multiplicity of owners, and it mitigates some of the challenges of distributed ownership. But the question of who will exercise control becomes more complicated with each new generation. Vitamix, the 100-year-old manufacturer of high-performance blenders, operates this way. Shares are passed down to descendants, but in each generation the CEO must own or control a majority of voting shares. Although the owners aim for consensus on big decisions, the CEO makes the final call. One of the chief risks is conflict over who will lead. Another is the possibility that those not in power will lose interest and sell their shares. Although hybrids exist, most family businesses fall into one of those four categories. (If a family business has some shares that are publicly traded, it may fit into any of them, depending on how the family has decided to handle its piece.) In a survey we conducted of family businesses of various sizes and across numerous industries and geographies, we found that 13% had a sole owner, 24% were partnerships, 36% had distributed ownership, and 27% had concentrated ownership. The type of ownership needn’t be a static choice. Be on the lookout for the need to make a change, which may arise when the next generation is joining, when the size or complexity of the business alters significantly, or when you’re bringing in outside leaders. The Antinori winemaking family had a sole owner for 25 generations: Control passed to a male descendant, keeping the business and associated land united. But Piero Antinori, who took the reins in 1966, has three daughters and no sons. He opted for a three-way partnership to succeed him. How Will You Structure Governance? The owners of family businesses wield profound decision-making power. We know of sizable companies in which not a dollar can be spent without their approval. When this power is channelled appropriately, it confers a major competitive advantage, facilitating the nimbleness needed to capitalize on opportunities as they arise. Many family business leaders we know can make big bets at a moment’s notice, without having to run decisions through multiple layers of management and bureaucracy. “Speed of response is becoming more crucial, and we can put large projects to work quickly,” says Alexandre Leviant, the president of the specialty chemical conglomerate ICD, which his father founded in 1952. But if that power is wielded ineffectively, the business will suffer. Some owners exercise too much control, stifling innovation and making it hard to attract and retain great talent. Others step back from major decisions, leaving a vacuum that may be filled by executives looking to their own interests. We saw a number of family businesses nearly destroyed when decisions were left to nonfamily managers who wanted to run the company down and buy it at a fire-sale price. Governance in a family business is all about finding a middle ground between micromanaging and abdicating responsibility, and it becomes more challenging as the family and the business grow. We suggest a simple framework to guide decision-making: the four-room model. Imagine your business as a home with one room each for the owners, the board, management, and the larger family. The owners set high-level goals and elect the board; the board oversees the business and hires (and if necessary fires) the CEO; and management recommends business strategy and directs operations. Because the board and management report to the owners, the first three rooms are in a row, with the owners’ room on top. The family’s room, which is critical for maintaining members’ emotional connection to the business, sits alongside the other three, underlining the importance of family influence and unity throughout. In a well-run family business, each room has explicit rules about who belongs there, what decisions are made there, and how. People’s roles vary from room to room. For example, a nonfamily CEO can run the management room but shouldn’t decide how the owners will use their dividends. Nonowner family members, for their part, can’t walk into other rooms and make decisions. Governance based on the four-room model makes the hierarchy and boundaries clear. Time and again, we’ve seen businesses slide into chaos for lack of a good decision-making process. Too often the problem becomes apparent only after disagreements have begun to destroy what years of collaboration built. At a regional retail chain headed by a family member we’ll call Steve, the lack of governance let his self-described “cowboy” instincts run unchecked, sparking resentment in his sister and his cousin, who were equal owners. Once they all recognized the problem, they turned to the four-room model and created an owners’ council, which Steve was required to consult for decisions of a certain magnitude. That allayed his co-owners’ concerns while forcing him to plan big moves more carefully, and the business—along with the family—got back on track. The four-room model helps owners maintain control over the most important issues and delegate other decisions. It establishes a process for revisiting decisions as goals evolve for the family or the business or both. How Will You Define Success? The owners of a business have a right to the residual value it creates. With that right comes the ability to define success. For widely held public companies, that’s straightforward: They aim to maximize shareholder returns. But few family businesses we know would describe their primary objective in those terms. That’s one of the best things about family ownership: You get to determine what matters most. No outsider can force you to value earnings growth more highly than, say, providing family members with employment, or can insist that you pursue opportunities that clash with your beliefs. Effectively exercising this right can be an incredible advantage in making a business last. It enables a long-term, generational approach that contrasts sharply with public companies’ obsession with quarterly results. But not all families are clear about what they value most. That lack of clarity can trigger battles over priorities, missed opportunities, or a failure to retain talented employees. More fundamentally, if you are unclear about your objectives, you risk losing your raison d’être for being in business together, especially as the company grows and transitions to new generations. Your path may become a dead end. To avoid that fate, you need an owner strategy that identifies concrete goals and sets up guardrails. Goals. These fall into three main categories. You can aim for growth: maximizing financial value. You can seek liquidity: prioritizing a healthy cash flow for the owners’ use outside the business. You can look to maintain control: keeping decision-making authority firmly within the ownership group by avoiding outside equity or debt. There will be trade-offs among these options. You might pursue only one goal, or you might decide on a combination. We have found that for most family-owned companies, this is a “pick two” situation, meaning they prioritize two goals at the expense of the third. That suggests three basic owner strategies—one for each possible pairing of goals, each forming a side of what we call the owner strategy triangle. Growth-control companies — the most common type we have encountered—focus on becoming bigger while keeping decision-making within the owners’ purview. Growth-liquidity companies also seek to become bigger, but they pay out considerable money to the owners and use outside equity or debt or both to keep the engine going—consequently relinquishing some control. Liquidity-control companies are not concerned with rapid growth; instead they hope to produce a significant cash flow for the owners while retaining decision-making authority. We know highly successful family businesses that have chosen each strategy combination. And these are broad strategies; companies can find spaces between them. What’s most important is understanding the explicit and implicit choices you are making about what to prioritize; those should flow from your fundamental values. You should revisit your choices as circumstances evolve, whether because of external factors such as economic developments, industry consolidation, and regulatory shifts or because of internal factors such as generational transitions, family conflict, and changes to senior management. Guardrails. Aligning on priorities is essential. But without concrete ways of measuring performance, it’s just lip service. Guardrails can help ensure that those running the business day to day are directing their energy and resources toward what you as owners care about most. They allow you to delegate decisions more confidently. Guardrails can be financial or nonfinancial. Owners should home in on a small number of financial ones—for example, minimum levels of return on invested capital or maximum levels of debt—and ensure that the company stays within them. Nonfinancial guardrails define outcomes for which owners are willing to sacrifice financial performance. The values informing them are often part of the glue holding the family together and a means of making the world a better place. For example, we work with a U.S.-based family business whose members lost relatives in the Holocaust. It invests only in countries with a high score in the non-profit NGO Freedom House’s annual ratings. Having a clear owner strategy fosters longevity by ensuring that the business accomplishes the owners’ financial and nonfinancial goals. Over the long term, families need an emotional connection to their company; they must be able to say, “We own this because we want to make a difference” or “This represents what our grandfather sacrificed to give us a better life.” Without an emotional connection, owners may be tempted to cash out. What Will—and Won’t—You Communicate? Owners are legally entitled to know a great deal about their business, such as what’s in financial statements, certain organizational records, and ownership documents. And except when they bring in outside investors, lenders, or board members, they are not obligated to share that information with anyone (other than the government). That means they control communication; nothing of consequence can be shared without their permission. How owners exercise this right significantly affects the business’s longevity. That’s because effective communication is critical to building one of a family business’s most valuable assets: trusted relationships. These are often underappreciated, but they help generate three important things: Financial capital : committed owners who have an emotional connection to the business and value long-term performance Human capital : engaged employees and family members, including spouses, who bring their full talents to their work and the family Social capital : a positive reputation with customers, suppliers, the public, and other stakeholders, which can help differentiate you in a crowded marketplace and build partnerships across generations The impulse to keep things private is understandable. Privacy can protect the business and the family from outsiders. But if owners hold their cards too close to the vest, they risk starving the business of its ability to cultivate valuable relationships. A business school professor we’ll call Sophie married into a family with a fourth-generation media business in Asia. Concerned about what she saw as a casual attitude toward innovation, she began asking about the company’s long-term strategy. The more questions she asked, the more information the executive team withheld, until it requested that her husband stop sharing financial reports with her for fear she would “rock the boat.” Sophie became increasingly anxious about whether her children would inherit a business with any value. In the face of the stonewalling, she withdrew, even scheduling vacations elsewhere during the family’s annual reunions. That deprived her children of opportunities to forge relationships with their cousins (and future co-owners), which could have a devastating impact on the business in the years to come. Delaying or poorly planning a transition to the next generation can wreak havoc on the family and the business alike. You need a continuity plan. Early on in the life of your business, communication is likely to be informal, perhaps taking place over meals. As things progress, consider what meetings, policies, functions, or technological platforms could improve your dialogues. Start by aligning on what you will and won’t disclose to each audience. In our experience, owners are often so worried about protecting details regarding their wealth that they fail to think through what they can share to help stakeholders feel connected to the business’s long-term success. Such information might include your owner values and strategy, how decisions will be made, how you think about succession, and your passion for the business. If you decide to keep such information private, tell your stakeholders why. We have seen cases in which the failure to communicate effectively was the single biggest reason for a family business’s demise. We’ve also seen some in which skilful communication pulled the company through tough times. Wield the right to inform wisely. How Will You Handle the Transition to the Next Generation? The final right of owners is deciding how to exit. You can choose who will own the business next, what form that ownership will take (whether shares or a trust), and when the transition will occur. With this right come complex and difficult decisions. What will you do with the assets you worked so hard to build? How will you let go? What roles should members of the next generation play? How should you prepare them? Are the relationships among them strong enough that they can work through decisions together? Delaying or poorly planning your transition can wreak havoc on the business and the family alike. A Boston Consulting Group study of more than 200 Indian family businesses found a 28-percentage-point difference in market capitalization growth between companies that had planned their transitions and those that had not. Family empires may be consolidated or squandered in the transfer of power across generations. To execute a successful transition, you’ll need a continuity plan that maps a path from the current generation of owners to the next. It should address three main challenges: Passing down your assets. Will you keep the same type of ownership (sole owner, partnership, and so on) or change it? Will you transfer ownership all at once or gradually (for example, by giving economic interests to the next generation while retaining voting control)? What tools, such as trusts and gifting, will you use to minimize taxes? Handing off roles . How will you create the glide path necessary for the current leaders to let go? How will you select successors across the four rooms in a way that feels fair and identifies the most-talented candidates? How will you ensure a smooth passing of the baton? Developing next-generation capabilities. What skills will each of the new owners need, whether they actively work in the business or not? How will you help them identify the roles for which they are best suited? How will you create opportunities for them to learn how to collaborate with one another? Transition is a process, not an event—and the more the continuity plan resembles a discussion rather than an ultimatum, the greater the chances of success. The plan can’t simply be dictated from one generation to the next; incoming leaders need to be prepared and aligned. To see what can happen when they’re not, consider the Pritzker family, which built the business empire that includes Hyatt hotels. Jay Pritzker, the leader of the third generation, and his brother Robert gathered the family in 1995 and handed out a two-page document describing their succession plans. It detailed a complex web of trusts created to hold the family’s assets, spelled out when members would receive distributions, and assigned leadership to a triumvirate. It was undoubtedly well-intentioned, but it didn’t work. Just months after Jay’s passing, in 1999, a series of lawsuits began. The family eventually decided to divide its holdings. Oftentimes the biggest hurdle to continuity planning is getting started. When facing pressing concerns in the present, it can be tempting to put off cross-generational conversations that may be fraught with issues of mortality and identity. So put those conversations on your agenda (in your owners’ room, with a designated continuity-planning task force, or through your board) and set some deadlines for them. We won’t sugarcoat the bottom line: Without hard and smart work by the owners, other family members, and employees, family businesses often implode. Much energy is needed to keep the many competing interests from turning destructive. There is no single way to survive, and there are few universal best practices. But by applying the five-rights framework, you can organize yourself for the work that family ownership requires. Ask the members of your business to individually assess your performance against each right. Then share the results and develop a plan that builds on your strengths and shores up your vulnerabilities. Only through such collaboration can you use the power of ownership to sustain your family business for generations to come. First Published in the magazine January/February 2021 by Harvard Business Review Reproduced with permission of the author.

HE Simm is a family owned, £100m, engineering and services business. Their roots are in Liverpool, but they have progressed over the last 70+ years to become a firm player in the mechanical, electrical and services industry UK wide. The Simm family own and run the business, which is currently in the third generation. The company won two coveted industry awards at the end of last year, with the judges acknowledging the wins due to the culture the family has created. We spoke to the current CEO and family member, Gareth Simm to find out more. “As the CEO of a family-owned and operated engineering and services business, ensuring that we have a good company culture – in terms of purpose, values and behaviours – is one of my key priorities. But what does a ‘successful culture’ look like? What does it mean?” As Gareth continues, “I believe that the clearest sign of a successful culture is employees who are happy, fulfilled and trust the company. We are a very close-knit team and our people are our greatest strength. Our founder and my grandfather, Ernie Simm, had a vision of building a ‘family’ of colleagues and we still take pride in valuing and investing in every individual who works with us. We aim to bring out the very best in people, giving them the support and training they need to learn, grow and achieve more than they ever thought possible.” “In my experience, business success then very often follows naturally. Employees who enjoy their job are more productive and stay longer, reducing turnover and the cost of recruitment and training. Having the right culture enables people to keep delivering quality day after day, motivated by genuine concern for the business because they feel that it’s their business,” he adds. “This has been starkly demonstrated over the past year. The Covid-19 pandemic has created a sink or swim scenario for many businesses in the UK and it is those with a strong culture that have managed to weather the storm best.” So what steps can businesses take to create a successful culture? Align strategy and culture For Gareth, one of the key things to do is to recognise the importance of having a strategy, as most businesses do – a long-term plan that includes goals and objectives, products and services, who your customers are and the markets you serve. What many fail to do, in my experience, is ensure that their company culture aligns with this strategy.” “Culture is the engine that drives your company strategy. If your company culture doesn’t underpin your strategy through the values and behaviours it promotes, then your strategy is likely to fail.” Learn from your ‘moment of truth’ Covid has been a real moment of truth for much of the UK, including the construction industry. “It’s at tough times like these that you find out whether your culture is worth the paper it’s written on. Good culture isn’t just about what you say as an organisation; it’s about what you do,” he explains. “Like all businesses in our sector, we have had to make some difficult decisions over the past year. However, we have tried to always lead with authenticity and take action that is in line with our fundamental values and culture. Firms that didn’t do this – that unnecessarily delayed payments to suppliers and didn’t adapt, for example – will have had their moment of truth. And in most cases, the outcome is unlikely to have been positive,” adds Gareth. “As we begin to see light at the end of the pandemic tunnel, now is the time to reassess and realign your culture moving forward, ready to meet whatever challenges lie ahead.” Lead with values As Gareth continues, “It is vital for business leaders to reflect their company culture in all they do. My grandfather’s ‘motto’ was: “If you’re honest, treat people fairly, provide a superior service and quality, and always deliver, people will trust you and work with you again.” It’s an old-school way of looking at things, but rings true to this day.” “Our values – teamwork, people, excellence and honesty – underpin every decision I make as CEO. I believe this enables me to lead with consistency and has helped to win the trust and confidence of customers and employees alike. On a personal level, creating a team of people who are eager to come into work every day and be at their best has been hugely rewarding,” explains Gareth. Empower employees By enabling employees at the coalface to make decisions and take responsibility for their work, HE Simm have also empowered their employees to drive the company values in everything they do. To really embed a culture and ensure that it informs everything your business does, they have created leaders everywhere. As Gareth continues, “If you expand your idea of a culture through to all touchpoints of the business, the benefit is immediately noticeable. People like to be treated with respect, regardless of whether they’re a CEO, an engineer, receptionist or supplier. Before you know it, your culture will permeate every aspect of your business, including the supply chain.” Think long term Finally adds Gareth, “A key difference between our family-run business and a big PLC is that ours works for future generations and prosperity, rather than quarterly financial figures. With a focus on long-term stability and performance rather than short-term profit and growth, it is infinitely easier to create a strong culture.” “The Covid-19 crisis has exposed holes in many organisations that made hay while the sun shone, but neglected the idea of rain. Beyond this pandemic, there’s going to be a new normal." "Businesses will have to adapt their cultures to be successful; adapt to decentralised working structures and, in many cases, material or supply chain disruptions. Ahead of the next crisis, I believe the industry as a whole needs to shift from focusing on short-term goals to longer term solutions underpinned by forward planning and, crucially, strong culture,” he concludes.

Family businesses are much more well-thought-of than other businesses, according to a new landmark national survey. Based on a 2,000-person survey, the research found that branding a private company as a ‘family business’ resulted in a significant and powerful reputational premium for the business. Nearly 66 percent of the public would think more positively of a business if they found that multiple generations of family members were active in its management. Conducted by specialist communication agency Transmission Private , the so-called ‘reputational premium’ was seen in all genders, regions, and age groups. In fact, the marked boost in reputation was at its strongest amongst the very youngest respondents, with nearly 70 percent of respondents between 18 and 25 years of age saying they would think more positively of a family business. The results come at a time when many businesses are scrambling to improve their reputations as the corporate world comes under fire from increasing levels of consumer activism — on issues as varied as sustainability, diversity, and pay — as well as finding themselves on the sharp end of difficult questions about reliance on government support to weather COVID-19. The research suggests privately-held businesses are missing a trick if they are failing to give visibility to their family ownership as part of their public relations strategy. Jordan Greenaway, Managing Director of Transmission Private, said: “The reputational benefits of being seen as a multi-generational family business are now clear, obvious, and significant.” “Sadly, there is sometimes an inclination amongst family businesses, especially once they get to 250 employees and above, to adopt the positioning of a publicly-listed, colourless corporate entity, airbrushing the family out of its public profile.” “We are now proactively advising businesses to reverse this, giving careful visibility to their family ownership and values. This may mean showcasing the business’ family heritage on their website or within collateral, or feeding family ownership messaging into communications and PR campaigns.” “Many of the biggest family businesses worry that giving visibility to their private ownership will expose family members themselves to criticism, but this is misguided. Clearly, the prominence of the family in the branding will differ from company to company, but this is not a discussion that should be shied away from.” The research also found that succession events, where a younger generation takes over management of a business from an older generation, throws up particular communications risks to family businesses. In fact, more than 1 in 4 people said they would think negatively of a family business if a younger member of the family was appointed to management out of the blue. The sudden appointment of a next-generation member to a company leadership runs the risk of triggering concerns amongst customers, partners, and peers that they might not have the skills, competency, or networks to continue running the business successfully. Luke Thompson, a Partner at Transmission Private, said: “This is worrying because many next-generation members will have been actively involved in the business — just not visibly.” “We are now advising family businesses to get ahead of the curve on this front. Family businesses need to start giving gradual visibility to next-generation family members up to a decade in advance of transition events, whether that’s on their website or within press announcements.” “Next-gen members should also be treated as a reputational asset to the business and its reputation. They often will have developed new skills from having spent at least part of their career outside of the family business. The new skills they are bringing to a business should be emphasised in collateral and communications activity.”” Transmission Private is the leading global strategic communications adviser to successful individuals, families, and their companies. The poll was conducted by OnePoll, which is a member of ESOMAR and employs members of the MRS. Download and read the report here: