Recent research reveals the aspects of family business that provides competitive advantage in the marketplace. The recent report, Family Businesses: Competitive Strengths and Qualities published by Coutts and Co examines the strengths and qualities that characterise a family business, drawing upon the experiences and insights of over 300 of Britain’s most successful family businesses. The report explores the challenges currently facing family firms. The top five strengths cited by family businesses are: Exceptional Human Resources Practice Nuances that differentiate them from other businesses include good staff retention based on a strategy of working hard to find the right level for everyone. Middle ranking positions might be held by individuals moving at a steady pace through the organisation, or not moving at all. This contrasts with an ‘up-or-out’ approach used in other organisations involving key staff progressing along defined career paths within pre-defined timescales. Loyalty amongst family members extends into the relationship with non-family staff members, in addition to customers and suppliers. Agility And Flexibility In Decision Making The structure of family businesses tends to enable flexibility, speed of decision-making and pragmatism. Flexibility is critical in these changing times which result in changing attitudes from customers, supply chains, staff and regulators. Those that can react quickly stand the best chance of survival. Agility is balanced with their ability to take the long-term view and not be thrown off course by the immediate economic environment. Personal Approach To Doing Business Family businesses have a particularly ‘personal’ approach to doing business and have strong relationships with clients, customers and key suppliers, enabling deep, embedded knowledge about them. This enables businesses to respond to their needs and foster long-term relationships. Family businesses are also more likely to have a well established position in the local community than a corporate whose connections are less personal and more remote. The personal approach to doing business is also linked to low staff turnover, particularly at senior level. Honesty And Integrity In Business Affairs Family businesses are more likely to have values such as honesty, integrity and straightforwardness more deeply embedded within both the family and the business. Family businesses tend to be held together as much by soft issues as hard, economic ones. They are higher on the business agenda than in non-family businesses and are often deeply embedded in the culture of the business over generations. The Family Is A Source Of Commercial Strength Many family businesses see the fact that they are a family business as a source of competitive advantage and a major contributor to brand image. The family reinforces the sense of passion and commitment, with key family stakeholders being committed to the business, to each other, to customers and clients. Many family businesses also like to do business with other family businesses, which creates other exciting opportunities Juliette Johnson, Head of Family Business at Coutts says: “These findings reinforce our experience of what makes family business so special and what gives some the ability to survive over many generations, qualities which many non-family businesses could emulate. Family Businesses do not tend to celebrate and promote their successes often enough. We hope that by making these findings available for the benefit of other family businesses, it will encourage others, to consider what gives them a competitive edge.” “Many organisations actively promote the fact that they are a family business and others see it as something that underpins the whole way they do business. Having values such as honesty and integrity helps family businesses maintain long term, stable relationships, both internally and externally, which is a core strength.” However these strengths are also viewed by others as weaknesses. Examples include hanging on to staff out of loyalty rather than because they are right for the business or the role at that time. As a result they may find it more difficult than other businesses to introduce and assimilate new talent. With personal relationships being key to many family businesses, many acknowledge they are too dependent on too few key members of staff. Others are too dependent on too few key client and customers too.

When it comes to the next generation in a family business there are plenty of challenges, often from day one as they are born into a business that is part of their family. All too often we hear stories from next generation members that life growing up was ‘different’ to their peers who had parents that worked in jobs and despite conversations about work taking place at home, they were not omnipresent. Some next gens see the lifestyle as a positive as the family firm has been part of their own DNA from the start, others find it hard to understand and fall out of love with the family firm as a result, often pursuing careers outside of the family firm. Some find the prospect of following in the footsteps of those before them an intimidating one. For some next gen, joining the family firm is part of their destiny, something they want to do, and whether they join direct from school or university, or pursue a career outside of the family firm first before joining, the day ultimately comes when they join and have to deal with all that this entails. Research from The Quest for Legitimacy, led by Dr. Jamie Weiner has found that the experience of growing up in a prominent family, irrespective of whether the decision is to join the family business or not, can be an isolating one. As a next gen joining the family firm, possibly with the family name included in the business name, there can be an element of imposter syndrome right from the start: Am I worthy of a role in the family business? How do I live up to the achievements of my ancestors? What do the rest of the family really think about me in the family business? Did I get a role simply because of who I am? Do I have the right skills to actually do the job? How do I manage my role in the business and the fact that I am a family member? There are plenty of challenges on day one and for many, ongoing challenges as a next generation family member as they grow further into the role. Whilst it is difficult to generalise, each individual seeks legitimacy, respect and appreciation for what they do along the way. How do I become the best at the role? What skills do I need to learn? How do I take on management and leadership roles? How do I become a good ambassador for the family firm? Am I a contender to lead the business in the future? How do I become a responsible shareholder? How do I make my own unique contribution to the world? There are plenty of opportunities to upskill and learn the qualities that are needed to fulfil roles in the family firm but for the next generation it is not always easy. For many, they want to get on with the job and earn the respect of the team by doing the job well, some may want to progress to the top but others may well be happy with a career in the family firm without becoming the leader. What is apparent however is the need for family to talk, to share the needs of the business, personal plans and desires and to be able to fit individual aspirations within the bigger picture of the family business, where it is today and where it is going, and the roles available now and in the future. Russ Haworth, Co-Director of The Quest for Legitimacy says, “In addition to the typical conversations around preparing the next generation, recognition is also needed of the importance for them to be able to develop their own sense of self, their own agency and the ability to add their own unique contribution to the world, irrespective of whether this is within or outside of the family business.” Conversations enable any pre-conceived assumptions to be put aside, people can be honest about their intentions and what they are looking for from their career, and the business decisions that need to be made around leadership and future leadership can be explored more openly too. Often, the next generation remain silent on key issues out of respect for their elders but this can ultimately cause problems and all family firms are encouraged to have a framework and structure that enables conversations to be held, on a family level, a business level and a family business level. Down the line, there may well be a leadership succession to a family member and conversations and planning enable a greater chance of success. Honest conversations again become important as the older generation need to stand down effectively, recognising when the time is right to do so, possibly into an ambassadorial role and to leave the next generation to make their mark. Good governance also helps to produce the framework to enable the next generation to know what they are doing, what is expected of them and to provide support in their new role. Russ adds that “acknowledging that we are all on our own quest for legitimacy will also play a valuable role in successful transitions, this includes the senior generation.” Being the next generation in a successful family business can be a challenge and it is important that measures are sought to offer input and support – peer groups, networks and learning forums are a great place to start to ensure that the often quoted ‘it is lonely at the top’ does not become incumbent on the next generation too. Dr Weiner has been researching the experience of growing up in a prominent family for five years and the research has uncovered that there is path we follow in attaining legitimacy and agency, this has been captured in his new book, The Quest for Legitimacy; How Children from Prominent Families Discover Their Unique Place in the World. This uses stories from the lived experiences of those that have navigated the path to highlight the four, non-linear phases of The Quest and the importance of not just focussing on how to prepare the next gen for a role in the business, but broadening this conversation. There are plenty of multi-generational family firms that have successfully passed down to the next generation which shows that it can be done, but it is not always easy and time and effort needs to be spent creating the right environment, support mechanisms, roles and responsibilities to make it as easy as it can be. Nobody ever said it was going to be easy, but there are ways to help smooth the journey too. Being a next generation family member is a journey, for some a rite of passage from birth, but there are also some key milestones (or memories too): The first day in the office The first management role The first board meeting The first family council meeting The first day as the CEO The good news is that plenty of fellow next generation family members are open and willing to share their insights and the more collaboration and conversation, the more myths that can be ‘de-bunked’ and more resources and tools created to help future next generation members on their journey too. As a next generation family member, family is there whatever, but the challenge remains, gaining respect for what you do as a family member and becoming the best possible version of yourself in the business too. This starts with an internal feeling of legitimacy and the process for attaining this can help you to explore and answer one important question, is a role in the family business really for me?

Designed to be a one-stop location for security fencing products, the centre will hold large stocks of Palisade Fencing, V-Mesh Fencing and Gates as well as ancillary products including concrete postmix and security fixings. Located in Garforth, Leeds next to one of Naylor’s manufacturing facilities, the new centre is based on a separate site and includes a retail trade counter and offices. Jason Torvill at Naylor said: “Our new retail fencing centre is designed to give customers easy access to the full range of security fencing and gate products in one location. Benefitting from high stock levels and close proximity to our concrete fencing manufacturing site, the new centre will make it even easier for customers in Yorkshire and surrounding counties to obtain the fencing and related products they need at short notice.”

A Middleton on the Wolds-based family poultry business has created a new role in its factory team to support its growing business. Renata Zeliutkova has joined the team at Soanes Poultry as Production Manager to manage the day-to-day running of the production line. Ms Zeliutkova is excited to join the growing business: "It's a great time to join Soanes and I'm looking forward to supporting the factory team." Soanes Poultry's Factory Manager, Dmitrijus Solovjovas said: "In the last few years, we have invested millions of pounds to produce multi-award-winning chicken, but we need good people to continue to grow." "Right from the start, Renata's dedication, efficiency and attention to detail were obvious and she has already proved to be an invaluable member of the factory team. So much so that she was recently awarded Employee of the Month, which is unusual for a new starter." Ms Zeliutkova's interests outside work include cars, motorbikes and spending time with friends and family. Soanes Poultry is a family-owned business that has been rearing and preparing chicken since 1947. It sells chicken to butchers and independent retailers in Yorkshire and to wholesalers nationwide.

Stuart Dantzic is showing incredible entrepreneurial spirit as he seeks to grow a resilient family firm for the future. The pandemic continues to create a challenging environment for family businesses to navigate but one thing that we have seen throughout 2020 is the perpetual desire to succeed and the resilience of the family business sector. Generally recognised for taking the long-term view family but recent events have brought survival to the top of the agenda and family firms have had to respond. To that end, many family firms across the UK have shown their strength, developed their purpose and let resilience come to the fore. Stuart Dantzic, second generation Managing Director of Caribbean Blinds is one such example. Caribbean Blinds, established 1987, is a multi-award winning, second-generation family-run manufacturer of luxury external shading systems, that transform the use, functionality and enjoyment from all types of spaces. From humble beginnings the company has grown to become the leading supplier and pre-eminent name in external shading in the UK. Working across residential, contract, commercial and trade, their products can be seen adorning the facades and gardens of discerning homeowners and businesses across the UK, with notable celebrities and prestigious commercial establishments amongst their ever-expanding portfolio of clients. The company’s foundations are built around providing innovative external shading systems that deliver genuine lifestyle-enhancing/energy-saving benefits, coupled with premium quality, stylish design, exacting service, value for money and above all else expert knowledge and advice to enable clients to make an informed decision. Stepping Up To The Challenge For family business, there is the unique desire not only to make money but to create a legacy for the family name. Therefore, everything that is done is based on share vision and safeguarding for the future, building on what previous generations have achieved. For Stuart, this is the underlying purpose behind the family business. “My parents founded and built our business over a 30 year period and as a second generation business we are now looking to the next 30 years and beyond. It is not just about maximising the revenue in the short term with a view to selling the business,” adds Stuart. Taking on a business as the second generation of a family firm is not always easy, but the process of generational transition for Stuart was made all the more easy by open, honest conversations with his parents. “Stepping up for me was almost an inevitability and when the time was right, my parents stepped aside and it was right for me to take the lead. All of the experience that I had obtained within the business to that day stood me in good stead to take on the role and even today, it is fantastic to have my parents and their worldly advice and experience at the end of the phone or around the table too,” he continues. Making Their Mark For Stuart, making his mark and stamping his personality on the business was all part of the process of preparation of the business for the future. For Stuart, he commented, “It is all about continuing he legacy that my parents created, keeping our family name associated with the very best in our industry sector and growing the business to the next level.” Stuart works closely with his brother and fellow director, Brad, a partnership that benefits from clearly defined roles and responsibilities. “It is great to be able to work with my brother who I trust wholeheartedly and we really do share the same vision and values for the business. Whilst he can be more pessimistic than I am, we work well together and are a great combination, making the right decisions collectively to balance the needs of the business against the risks going forward but we both appreciate the need to work towards the same goal for the business too,” continues Stuart. Like all family firms, next generation leaders stepping into the leadership roles need to earn the respect of their team, put their stamp on the business and take the team on the journey with them and also make sure their voice is heard. For Stuart and Brad, both of whom had been involved in roles within the business from a young age before following their studies and coming back to work in the business, they were both able to rely on the hard work they had put in over the years doing various jobs within the business, to have earned the respect of the staff, and this was a real benefit to them when their roles changed. As Stuart adds, “It made such a difference knowing how the business worked and all the different roles within it, many of which we had done ourselves, when it came to taking over the business and making our mark and has been the foundation for our continued evolution.” Investing For The Future The pandemic has created opportunities for some family businesses and Stuart recognises that Caribbean Blinds is one of the lucky ones. Firstly and more importantly, for any business going into a period of adversity and uncertainty, a business needed to have been trading successfully to place it in the best position to weather the storm. As Stuart explains, “When the pandemic hit and we were plunged into the first lockdown, we were not faced with the need to strip back to save costs and what to do to make money in the short term, but found ourselves looking at what opportunities were open to us. Like many others we went through a process of review, adaption, implementation and communication with the latter, in my opinion, being the key element.” Communication was important at all levels and with all the stakeholders in the business, creating certainty for staff, sharing updates with existing customers and broadening relationships with potential customers and other interested parties. “We may have been closed temporarily but this period was really important and the messaging key. In fact, it was down to the communication and operational ability of the team to deal with enquiries and estimates that helped us to build the pipeline so that when we were allowed to return to production we were ready and able to go with a good order book too.” Resilience and a determination to succeed, investing in their people and technology to seize the opportunities have resulted in record months post Lockdown and a good order book into 2021. As a business, Caribbean Blinds continue to look to the future and plan for the long-term, but with a core, resilient strength that is driving results and creating a successful family firm. Shared values and clear communication with a common purpose are really driving results and the business is investing. A new 10,000 square foot extension to the factory will be operational in the spring to meet the growing needs of customers who are investing in their homes and gardens. Despite the positivity surrounding pandemic vaccines this growth looks set to continue with less people planning overseas travel in the short term. Caribbean Blinds are focused on the future with new products including enhancements to their Outdoor Living range plus exciting innovations in the development of ‘green buildings’ and with a growing, dedicated workforce it really does look like the resilience, innovation and entrepreneurship bode well for their future. As Stuart concludes, “We need to be resilient as an organisation. We are weathering this storm and being prepared and resilient and innovative will create the right internal environment for us to weather other storms in the future too.” Three things to prioritise: Strategy – Focus on the strategic priorities of the business, taking the time to focus ON the business rather than the day-to-day operational aspects of being IN the business and try to not be phased by the unexpected. Communication - Frequent, open, honest communication is key to keep everyone working towards the collective goal. Involve Others – Seek input as to the challenges and opportunities which will increase team buy-in, generate operational efficiencies and make a real, tangible difference.

Scattered holdings with too many people involved, cousins in different countries running their own kingdoms in silos, & the changing environment of business can often get too complex. “If you cannot make it greater, at least preserve it. Do not let things slide. Go on doing my work and increasing it, but if you cannot, do not lose what we have already done,” said Jamsetji Tata to his sons on his death bed! This is the emotion, which most founders of Family Owned Business (FOB) worry about and yet are unable to help the next generation to achieve. FOB’s can be very complex for the next generation if they don’t understand the business. Scattered holdings with too many people involved, cousins in different countries running their own kingdoms in silos, changing environment of business, etc. can often get too complex. A desire to have their Presence in Absence is present in most founders & for that good succession planning is a must. Steward leaders understand and start planning about their legacy early in life. They ensure that the best of education is provided, and values/sanskars of the family are transmitted through different experiences to the next generation. Attendance on Sunday for lunch or dinner wherein all family members are present with each one tasked to do something small to make the whole event significant is compulsory. Rotation of such responsibilities prepares them for success, failures and team work, family marriages, founder’s day at the factory/office, hosting customers at home, meeting senior bureaucrats, diwali puja in office and these are all direct/indirect transmission of the business values and culture of the family. In India marriages are a big affair and have a community-meet kind of environment. Hosts spend months of planning to give it their best. With it also comes a lot of social pressure. Yet it’s great learning to make it better or manage things within a budget. A founder entrusted the 2 sons with almost equal abilities to manage different business verticals. Both performed well & there was a critical decision point where one had to be chosen as the next leader. Then came an opportunity for a large family wedding & he put them to test in a social setting. Both were asked separately of their plans. One of them did what he felt was right, outsourced most work to professionals and did not pay much heed to the opinions & sentiments of of others in the extended family. He felt times have changed and an open bar with a separate counter for non vegetarian food was a must. The other one took a different approach – he asked for suggestions & incorporated a lot of the family traditions with a modern wedding. Alcohol & non vegetarian food which was taboo in their community was to be kept out. For some who wanted some of that he provided it in another venue before the marriage ceremony. It was clear that he would be able to lead the team & keep them together and undoubtedly he was chosen. He was seen as someone one who would keep the family values intact & be able to deal with multiple factions much better than his brother. Visits to the office, factory and market place are a part of the informal training. At times an internship or small projects also build a lot of pride and passion into the next generation. I recall my friend’s grin when he was doing an IT project and his grandfather offered him his chair; pride was mutual. On the chair he listened to the views of people with intense curiosity & was more than courteous in his answers (maybe a rub off effect ). He did a live demo of his project & had succeeded in addressing the elephants in the room so well. His sitting on the chair also had unconsciously signalled to others that he was the future Boss! Story telling & dinner table conversations often rotate around things which impart lots of learning. Questions are answered and clarified; also at times values are imposed with long term discipline in mind. One day the Patriarch was asked why he left the Mercedes for other members to come to the meeting whilst he went in a smaller car. He smiled to say that he wanted to reach the meeting on time & since he was alone it was more economical & faster in traffic to use the small car, after all it was a machine used to carry people from one point to another. The use of the right machine for the right purpose at the right time is critical and was a solid message to deliver to the next generation. If its a customer visit he will use the Mercedes as its the FOB & first impressions do count. The value of money and the problems that money brings if not used with wisdom are explained thoughtfully. With changing needs I have seen many families that co-exist yet give freedom of choice to the members. Lifestyle needs are different and yet staying together means so much automatic learning. In India we have KARTA – the head/custodian/trustee of the family, normally the eldest male who by seniority of age runs the show. Active ones can do much & the passive ones just let the opportunity pass. Lifestyle changes have different people wanting / having different desires. One wants to travel, the other buy’s solitaires and someone wants the best food. The Karta outlined a plan wherein all personal expenses were to be borne by respective personal accounts for lifestyle needs. At a family value proposition no one was allowed to borrow money for any lifestyle need. Any medical or educational need out of the ordinary was to be fulfilled with a majority vote through a family trust although the KATRA would have a VETO! Active ones, knowing that they are going to give up power & position, command control in the larger interest of the family for generations. They keep communication open, allow for peaceful co-existence of different people & ideas and have a balance of compassion & objectivity in decision making. They make way for the new generation by moving into the background pursuing their other interests like philanthropy, creative pursuits etc. They know when to HOLD & when to FOLD. Look at the Tata’s – Mr Ratan Tata planned succession objectively and got in Mr Mistry. He was groomed & on boarded well. Yet after a few years when it was felt that things were not moving in the right direction he deliberated and took the hard step of ousting him. Mr Mistry held on & then folded back. Now I hear he asked for the Tata Sons board to be sacked for non performance…let’s see what the future unfolds. Both in my personal view are good human beings and are working in the larger interest of the business house of Tata’s. What the future Unfolds or happens next only history will tell but I hope peace prevails in Bombay House. Stewardship demands a lot of sacrifice and putting others ahead of you. Succession is one such issue which can make or break the legacy of a Steward if not handled well. About the Author - Naveen Khajanchi is a practising Executive Coach supporting senior level leaders to transform and adapt to the current business environment. He has worked with organisations from start-ups to high-end real estate consulting. Today, he leads a search firm that helps top Indian corporations in their leadership hiring. Naveen has more than two decades of experience in Talent Acquisition and is also the author of Evolutionary leadership – A Holistic Perspective.

Ashley Fina’s grandfather was a natural networker. As the founder of his own New York retail store, Michael C. Fina relied on his network to build his company into a beloved Manhattan institution, which counted Frank Sinatra among its customers. But when Ashley first entered the family business, she realised that while her grandfather had a robust network, his sons, including Ashley’s father, who eventually took over the business, did not. “They were so focused on maintaining and building what their father and mother had built, they didn’t turn their attention to building their own network. It was really my father’s biggest regret,” Ashley recalls now. Her grandparents’ vast array of friends and advisers — and reliable customers — didn’t simply pass from one generation to the next. So when Ashley was asked to become the company’s president and CEO when she was just 24, she made building her own network a priority. She joined the Young Presidents’ Organisation, the Women Presidents’ Organisation, and a women’s executive leadership organisation, called the Committee of 200. And she made a point of attending industry conferences and executive education courses. Her last name opened doors. “When you meet people, it’s an easy conversation starter,” she recalls. “Having this last name that was also a brand name helped.” In one instance, she was so intrigued after a keynote at a conference, she followed the speaker — a tech industry thought leader — around until she found an opportunity to speak to him. That person eventually became one of her most valuable advisers. Ashley recognised that in order to keep the family business relevant and thriving, she had to embrace opportunities that her visionary grandfather had not dreamed of. The store’s bridal registry business, for example, which her father and uncle helped popularise, faced stiff competition in the internet age. She needed relationships with rising leaders in technology and entrepreneurship who could help her prevent that line of business from becoming obsolete. Plus, working in a family business can be isolating. It’s likely that you’re surrounded during your work days by the same people you see at night and on weekends. This existing network of family members who have served as role models and mentors as the business evolved in the past can be helpful, but your familial relationship can make it difficult to get neutral advice. So it’s essential to branch out and have people outside the family enterprise that you trust. If, like Ashley, you’re a member of the younger generation of your family’s business, here’s some advice for gleaning the best of your family’s network while creating one that is distinctly your own. Build a network across age brackets. Don’t discount contacts and advisers who might reflect your grandparents’ or your parents’ generation’s values. Sometimes their input can serve as a useful proxy for what your grandfather or your mother might advise you to do — without the emotional baggage. Establish peer relationships within your own generation in the family. There are a lot of issues that can make it difficult to get along with people in the same generation in your family business: rivalries, proxy wars, family branch dynamics, differing relationships to wealth, and geographic distance. Actively fight unhealthy dynamics within your family. Cultivate relationships with people in your generation — both family members and non-family peers — to support each other and help avoid the battles that sometimes destroy great family businesses down the line. Transition your family’s existing network across generations. Just because you didn’t chose the existing network your family has, doesn’t mean it’s not valuable. The ability to form multi-generational relationships with business partners from other family businesses — e.g., suppliers, customers, or distributors— can be a key advantage. These relationships are often not just transactional — they’re built on trust, and better bonds are often formed knowing your parents or even grandparents did business together. But these relationships won’t transition from one generation in a family business to the next without effort. Work with the current leaders of your family business to identify which families in their existing networks you should build your own relationships with, and then develop a plan for getting to know them. For example, organise a business meeting where the next generation of both families listens in, and debriefs together. Or attend a talk at the industry conference for your sector together and discuss the implications for the future of each of your businesses. Cultivate two or three inner-circle advisers. It’s terrific to have a good number of people with a variety of opinions and experiences with whom to confer, but at the end of the day, you need a few people you truly trust to help you make good decisions. Though some people might be receptive to the idea of being in your network, many are too busy to actually help you. Focus on the people you can turn to when you need help and it’s OK to cut your losses with those who don’t. Beware of the ‘’users.’’ With a family brand name, it can also be easy to attract people who are more interested in what you can do for them than a mutually beneficial relationship. For example, Paul*, a fifth generation owner of a global industrial manufacturer, is aware that his family connections are unusually high-powered for someone who is only 30 years old. ‘’To put it bluntly, I have connections beyond my years — connections I have no business having, considering my own career trajectory,’’ he admits. But that has actually served to make Paul more cautious about tapping his family network at the request of others when it’s not likely to turn into a reciprocal relationship. Make sure you guard and protect the network that your family has already built. Take advantage of your unique opportunities. On the flip side, having a brand name can be a real benefit in building out your network. Jenn*, a third generation owner of a prominent family business, has taken to cold calling people whom she admires. She always has a good reason for reaching out — “I want to learn about your board,” or “What is your family’s approach to dividend policy?” — but she’s well aware that her last name encourages people to reply. Our experience has been that family businesses think of themselves almost like a secret society and are eager to help others who ask. So don’t be afraid to reach out. Working hard to develop her own network paid off for Ashley and her company. With the help of her cousins Jeffrey, Michael, and Steven, she was able to re-energise the family business at a crucial time, when competition from online businesses challenged their brick-and-mortar model. Then, her network of advisers helped her to make the difficult decision to sell the division of the company that created personalised awards and other recognition items for a company’s employees, while maintaining the ecommerce retail business in light of changing industry dynamics. And finally, her network has been instrumental in helping her determine her own career path by providing guidance on how to lead and reinvent the company after selling a key part of the family business. “I don’t know if I would have made such a conscious choice to build my network if my father hadn’t been so clear that he wished he’d done better,” she says now. “But in hindsight, I can’t imagine what I would have done without it.” *Not their real names. This article was originally published by HBR.org on 29 May, 2018 and has been reproduced with permission from Josh Baron.

Employing family members should be no different to employing non-family but there are some areas to avoid when employing family members in the family firm to reduce the risk of conflicts later on. In some respects employing the family is no different from employing persons outside the family. For example, family members who are employed in the business have exactly the same statutory employment rights as any other employees. However, because of the central role which the family plays in a family business, there can be potential difficulties associated with the employment of family members. A small family business may be able to get away with adopting a very informal approach to the employment of family members. However, as the family and the business grow, it is increasingly likely that any one or more of the following scenarios will cause difficulties, tensions, conflict and or resentment within the business: Family members are unsure as to what they need to do to be eligible for employment in the business Family members are employed in positions for which they do not have the requisite experience or qualifications They are paid more generously or provided with more benefits than their non-family colleagues There is no clear distinction between the duties and responsibilities of two different family members Contracts of employment are issued to non-family employees, but not family employees There are no clear reporting lines between family employees or between family and non-family employees The remuneration of family employees is determined by, and/or the appraisal of their performance is conducted by, a member of their immediate family Family employees are given no feedback on how they are performing They feel that they have no clear career path. Potential problems of this nature can be avoided by considering the following: Agree a set of criteria for determining who should be employed in the business.Those criteria can then be communicated to the next generation or, perhaps, set out in any family charter which might be adopted by the family . The criteria might include a requirement for a minimum period of prior experience with another business or minimum qualifications for certain positions within the business. Consider a rule that family members are employed on merit and that their remuneration is no more generous than that of equivalent non-family employees. Again, rules such as this might be set out in any family charter. Where possible, involve non-family directors in approving the recruitment of family employees (or subsequent appointments to the Board), deciding the remuneration of family employees and appraising the performance of family employees. This will help to guard against accusations of nepotism and hopefully ensure a meritocracy prevails. Consider assigning a non-family director or manager to mentor each family employee and to assist in putting together a career plan. Make sure that contracts of employment are issued to all family employees, as well as non-family employees. Apart from the fact that every employer has a statutory obligation to provide its employees with certain information about their employment, there are other reasons why it is important for family members, as well as non-family employees, to be provided with contracts: The failure to provide contracts to family employees will mean that non-family employees who do have contracts will be bound by restrictions which are not, but should be, equally applicable to family employees. This could cause resentment amongst non-family employees. It is important that each family member has a clear job description and reporting line, so that there is no doubt as to what is expected from that employee. There is always a possibility that employment of a family member in the family business may not be for life. The family employee may decide to leave the business and perhaps even join a competitor or start a competing business. In these circumstances it is important that the business is adequately protected by appropriate restrictive covenants, clauses relating to confidentiality or clauses clarifying the ownership of intellectual property rights. Treating family in the same way as non-family, when it comes to employment in the family business, will guard against the possibility of tension or conflict. It will help to ensure that family members command the respect of non-family colleagues and it will help the Board to measure more accurately the performance of the family as employees and, subsequently, directors.

A Yorkshire Wolds brewery and a Bridlington running club are partnering for the inaugural Wold Top 10k trail run. Wold Top Brewery has supported Bridlington Road Runners' half marathon event for many years, but this is the first time that the brewery is hosting its own event. The Wold Top 10k run takes place at the Hunmanby Grange-based brewery on 16th September and also features a children's 1k fun run, a hog roast and an option to camp at the award-winning brewery on the top of the Wolds. Brewery director and keen runner, Alex Balchin is looking forward to the event: "Starting from the brewery, you'll run an all-terrain 10k race around the Wold Top farm, finishing back at the brewery bar for a well-deserved pint and some food!" We are blessed with amazing scenery here on the top of the Wolds and our walking events always sell out quickly, so we thought it would be great to host a family-friendly event featuring an off-road trail run and a fun run followed by a hog roast and overnight camping. It should be great." The 10k run costs £25 to enter and includes food, a finishers' pint and medal and first aid on site. Organisers are suggesting a £2 donation for the 1k fun run that will go to St. Catherine's Hospice. Entries for the 10k run must be made online before the deadline of 30th August and there will be no entries on the day. Basic, but scenic, camping, caravan and motorhome pitches are available for £12 per pitch. You can book both the 10k run and camping online at https://bit.ly/WTB10KRun. Wold Top are hosting the event in conjunction with the team at Bridlington Road Runners.

It is widely expected that there will be a global economic downturn over the next 12 months, with western countries, particularly those in Europe and North America, being the worst hit. This is being caused by a number of factors – war in Ukraine, high inflation, the economic distortions caused by the pandemic and issues with the global supply chain. These issues have created volatility that could tip a number of countries into recession. During this challenging time it’s more important than ever that there’s good governance on the board. Having effective governance not only acts as a protector and an enabler to help boards navigate through uncertainty, but it provides a source of competitive advantage at a time of significant change. However, too many boards solely focus on compliance and process driven statutory duties when it comes to governance; such as ensuring the business complies with company law, and makes the necessary filings, including annual returns and financial statements. Boards need to understand that delivering effective governance is so much more than that. It’s about having four lines of sight, role clarity, regular board and governance reviews, an enabling culture and diversity on the board. Enabling Four Lines Of Sight For effective decision making in today’s volatile world boards must have the ability to focus on four lines of sight: hindsight, insight, foresight and oversight. 1. Oversight : Boards have a fundamental legal responsibility to provide oversight and accountability, so they must have the right processes in place to achieve this. Referred to as the board’s ‘fiduciary’ responsibility, directors need to make sure that the business is appropriately stewarding the resources entrusted to it and following all legal and ethical standards. 2. Insight : Effective boards understand the company, the drivers of financial performance and the organisation’s competitive advantage, including the context of the external business environment and the marketplaces where the company sells its products and services. This insight drives a more objective and enabling assessment of performance and strategy. 3. Foresight : The ability to anticipate, to see what is coming and the future forces that will impact on the competitiveness and sustainability of the business is essential to effective understanding of risk and development of strategy. 4. Hindsight : Most boards have significant company knowledge, the hindsight to remember previous initiatives and reflect on the good, bad and ugly learnings from the past. Tapping into this helps to create effective boards. To support successful decision making these four lines of sight must be live in the boardroom. Ensuring Role Clarity On The Board One of the most important foundations for good governance, and an effective board, is role clarity amongst directors on their responsibilities in contributing to the value creation by the board. Any ambiguity and confusion over roles, particularly in an uncertain world, will have a negative impact on board effectiveness and decision making. It’s the role of the chairman to ensure directors have absolute clarity about what their role entails and the value they are expected to bring to the board. Regular Board, CEO & Governance Reviews The pandemic revealed that some leaders under enormous pressure were ‘leading lights’ by spotting new opportunities for their organisation, and operating with agility and competence, while others were exposed as ‘simply light’. For instance, some CEOs recognised the importance of identifying a ‘once in a lifetime’ opportunity to transform their organisation during the crisis, to shape the business for the future to ensure it thrives. Whereas others under the burden of the Covid emergency shut down dialogue with the board and presented ‘oven ready’ decisions; or experienced uncertainty paralysis, delaying decisions. Then there were those who focused too much on the ‘present’ and took their eye off the future direction of the business. This is why boards need processes in place that ensure CEOs, and in fact all directors, are regularly reviewed – to provide an objective assessment of performance and identify development opportunities to enable the board to be fit to lead the business to future success. Unfortunately, undertaking reviews of those on the board was not a priority for many organisations during the Covid health emergency. The focus on navigating the pandemic overwhelmed the importance of objective, regular performance reviews. Now is the time to restart them, if not already. Those on boards gain significantly from a structured and systematic performance review, at least annually, with clear accountability and follow up to help ensure they are ‘fit for the future’ and deliver governance that is effective and creates value. Once concluded, these assessments might prompt the board to consider the development needs of the CEO and individual directors, as well as highlight opportunities to improve board and individual director effectiveness to drive business success. When it comes to evaluating CEOs and directors it is important to realise that boards require resilient leaders, along with a wider resilient workforce, in a world where volatility is the new normal. It’s worth bearing in mind that resilience is not just about the ability to bounce back from setbacks, but is the innate capacity to grow better and stronger when things don’t go to plan. Also, it’s not just important to review directors, but also governance processes. Particularly when business failures during the global financial crash, and the more recent pandemic, have led to corporate compliance facing increased scrutiny. For the board to achieve its purpose it’s best practice for governance reviews to take place at least annually. Nurture A Good Culture Those boards with good governance recognise that they are responsible as custodians of culture – maintaining, protecting and nurturing the good things, the ‘assets’, in company culture. If they are not already doing so in a time of economic slowdown, boards need to foster a culture of agility and adaptability both on the board and throughout the organisation. This releases the potential of directors and employees to provide new ideas to help take the business forward. It also requires that boards generate a curiosity and fearlessness to inspire creativity, innovation and continuous improvement. To achieve this boards must lead by example in demonstrating diversity of thought and ideas in the boardroom, as this will provide confidence to the rest of the business to follow suit. Additionally, the board needs to foster an open culture where bad news travels to directors faster than good, so any challenges can be resolved before they potentially become big issues. To do this the board must engender a culture of psychological safety to encourage employees to speak up and approach them with any bad news, and protect those that do. Diversity On Boards It is widely recognised that diverse boards are more effective than those that aren’t. Therefore, to ensure they deliver good governance and decision making boards must consider whether their current composition is appropriate to take the organisation forward. To accomplish this they should look at the board through the prism of the five drivers of diversity™ – demographics, skills, experience, thinking styles and circles of influence – and contemplate how well the current line up matches up. It’s important to highlight that diversity without inclusion is an illusion. Therefore, a key task of the chairman and directors is to enable the culture on the board to be one of inclusion, to gain the benefit of the different perspectives brought to decision making by a diverse board. With every organisation facing great uncertainty due to high inflation, the war in Ukraine and issues with the global supply chain, it’s time for boards to urgently consider these factors to deliver effective governance and decision making if they are serious about their business not only surviving but thriving in these recessionary times. Doing so will also provide a competitive advantage during this period of great change. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.

Effective governance involves people working together in a system, yet governance is too often approached in a purely legalistic or box ticking process-orientated way. Strong emotional and interpersonal connections, along with the culture this helps to create, make boards more effective and helps them to deliver good governance. In fact, effective governance demands three fundamental human characteristics that are the currency that keeps the system working well. They are trust, respect and honesty. All attributes of people! Additionally, it’s important to recognise it’s the dynamics of the group – the way that they interact and the way that power manifests in the social system that is our governance – that has an enabling or constraining impact on how well governance works. Therefore, boards ignore the human factors of the system that is governance at their peril. Challenges Due To Reduced Opportunity To Meet In-Person Unfortunately, the move to the virtual world, the growth in hybrid working and the challenges of meeting ‘in-person’ have made relationship building between those on the board increasingly difficult. This makes it harder to assess nonverbal communications and has reduced the opportunity for spontaneous ‘corridor’ or ‘kitchen conversation’ interactions where governance and other issues can be informally raised and advice dispensed. The Importance Of Emotional Intelligence It’s why directors are required to be emotionally intelligent today, so they generate good relationships with others on the board, and beyond. By being emotionally intelligent they are empathetic and have self-awareness when communicating; enabling them to build engagement, generate trust and respect, and provide leadership. For example, a chairman with emotional intelligence will evolve away from a traditional command and control style to a more facilitative leadership. This will see them construct and nurture a board culture of psychological safety, where bad news travels to the board faster than good, where directors have the courage to constructively challenge, and where it is fine not to have all the answers, particularly during these difficult times. Challenging assumptions is very important during a period of volatility, when decisions need to be taken quickly. Only then can the board have assurance that they are on the right path and governance is as it should be. Relationship Between The Chairman And CEO Due to the enormous impact it has on the performance of the business there must be role clarity and mutual respect at the foundations of the most important relationship in the governance system – that between the chairman and the CEO. To be a value adding relationship it needs to be one built on trust and where there’s candour and honesty on both sides, which is where emotional intelligence comes in. It’s those who operate with emotional intelligence who will reflect on how well the relationship is working, and take the opportunity to recalibrate, where required, to ensure that the rapport is an asset to the board and the organisation. Culture Emotional intelligence plays a very important role in helping the board to foster a positive company culture. This encourages healthy day-to-day attitudes, ethics, behaviours and ‘ways of doing things round here,’ that sets the foundations for real, tangible business growth. During these complex and uncertain times there are four pillars of culture that engender business success and good governance, all associated with the board being emotionally intelligent. 1) Agility and adaptability. To achieve this boards need to promote an entrepreneurial spirit which will help unleash the potential of their people to create new ideas to take the business forward. Boards need to engender a curiosity and fearlessness to inspire creativity, innovation and continuous improvement. As part of being emotionally intelligent boards must lead by example by demonstrating diversity of thought and ideas in the boardroom, so the rest of the organisation has the confidence to follow suit. 2) Resilience. To bounce back after setbacks and be in a position to deliver growth it’s emotionally intelligent boards that have robust, transparent and visible leadership, to help ensure engaged and empowered employees. 3) Moral courage. Building on from resilience it’s emotionally intelligent directors who are courageous in confronting reality and dealing with problems with integrity. They will create a culture of psychological safety to protect those employees who do speak up, and encourage them to do the right if sometimes difficult thing. 4) Candour . It’s those organisations with an open culture where bad news comes to the board more quickly than good which can quickly focus on and solve challenges before they potentially become bigger issues. Ticking off a set of legal requirements is not the way to deliver effective governance. Good governance relies on positive relationships between those on the board and the culture they generate, which requires directors to have emotional intelligence. This enables directors to gain trust and respect on the board, and throughout the organisation, enabling them to deliver effective governance in today’s increasingly hybrid working world. Additionally, having an emotionally intelligent board is vital in helping businesses to navigate uncertain times and drive long term profitability. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.

Businesses that continue to prioritise ESG during uncertain times will see increased revenue and happy stakeholders, says John Harte, Integrity Governance. The world is a very different place to the one it was at the beginning of 2022, when COP26 was front of mind and ESG at or very near the top of board agendas. The invasion of Ukraine has transformed the outlook for the economy and for organisations by creating volatility, whether that’s through sanctions and loss of markets, increased energy prices and associated wider inflation across almost all products and services, and supply chain disruption. Another contributing factor disrupting the global supply chain is China’s zero COVID-19 policy. Their current approach to curbing it with stringent lockdowns is adding further uncertainty. With boards prioritising their precious time negotiating this new volatile world, the question is where does this leave ESG? Should current ESG strategies be shelved, or should boards continue to focus on it as before, or place even more emphasis on ESG moving forward? Essentially, do they need to rethink their approach to ESG? ESG Remains A Vital Focus Those leaders and boards with foresight will recognise that despite the volatility ESG remains a very important focus for their organisation. One key aspect of ESG – concerns over the environmental impact of businesses – isn’t going away. Deloitte Global’s third-annual Readiness Report, ‘The Fourth Industrial Revolution: At the Intersection of Readiness and Responsibility’ reveals that not only is the environment on the minds of executives, but that climate change and environmental sustainability have become integral to how they are managing their businesses. Surveying more than 2,000 global executives, Deloitte Global found that almost 90% agreed to some degree that the impact of climate change will negatively affect their organisation. The world is getting warmer due to increasing carbon emissions and almost everybody recognises that action is required now if rises are to be small. This means those continuing to mitigate their impact on the environment at this time will be welcomed by stakeholders. Boards must realise that any increase in the use of fossil fuels because of the current volatility would need to be a very short-term policy, with their business having a clear roadmap to quickly reduce emissions in the medium to long term, if they are serious about ESG. The growth in activism from institutional investors will certainly help to keep the minds of boards focused on ESG. For example, BlackRock says in its proxy voting guidelines that it will continue to press companies to disclose a net-zero-aligned business plan consistent with their business model and sector. In 2022, that will include asking companies to demonstrate that their plans are resilient under likely decarbonisation pathways toward a global goal of limiting warming to 1.5C. New Opportunities To Grow Business The reliance on Russian gas and oil, particularly by many in Europe, presents an opportunity for forward-thinking boards to speed up their efforts to use sustainable and renewable forms of energy. Organisations should also bear in mind that many governments in Europe are realising that energy supply is now an increasingly important issue of national security and will seek to speed up moves towards renewable energy adoption. For example, Germany now plans to give up coal entirely eight years earlier than planned – and obtain 80% of its electricity from renewable energy by 2030. Amid this uncertainty, smart organisations will spot new opportunities to grow their business, with ESG front of mind. It’s those boards that are inclusive and gain the benefits of the five drivers of diversity – demographics, skills, experience, thinking styles and circles of influence – that will have an inherent competitive, decision-making advantage due to their board composition. Along with those boards that have effective governance processes in place, including undertaking regular reviews of directors to ensure they are fit for the future, who will be able to identify and embrace these opportunities. ESG Planning By The Board When it comes to ESG planning by the board – of which there are three key areas – the best place to start is to effectively plan for and assess risk. For example, the invasion of Ukraine highlights the risk of organisations trading in autocratic states, and those businesses serious about the ‘social’ in ESG should assess their business dealings in such territories and take appropriate action, if required. Secondly, boards should ensure that disclosure and reporting of ESG is verifiable and accurate. Lastly, there should be a good understanding amongst directors that they are individually liable if their business damages the environment. As the current volatility continues with the war in Ukraine, boards should consider how they may need to adapt their short-term ESG plans to ensure they don’t compromise their long-term ESG goals. The current energy crisis may accelerate the pace of change, with a reduction in use of non-renewable carbon fuels and increased focus on energy security. After all, boards have a responsibility to manage environmental capital and sustainability in a way that’s honest, reflects expectations and is good business. Those organisations that continue to prioritise ESG and spot an opportunity with ESG to grow their business during these uncertain times will experience happy stakeholders and increased revenue and help to deliver a better future for us all. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.