Stephen Bampfylde shares his insights and observations specifically focused on the role of the Board and its evolution in the time of crisis. Are there themes or trends, particularly emphasised in this time of crisis, which are emerging across board work requiring greater focus, insight or development from you and your team? I think we have seen a number of particular changes since the beginning of this crisis. The most apparent of those, be it temporary or possibly more permanent, is the change in relationship and distance (beyond physical) between the board and the executives. For example, if you are on a board and your organisation is in crisis you need much more frequent oversight: waiting a month for the regular board update is simply far too long. We are seeing that in most organisations, planning horizons and board calls have been pulled in dramatically: daily for some and certainly bi-weekly for others. Those organisations who thought they had a great plan at the beginning are in many cases finding that they are tearing that up and having to go much harder in terms of their planning and delivery strategies. Even those who were more cautious and took the approach of presuming the worst, planning scenarios for how bad it really could get before they would have to take serious action, are still having to review and recast their approaches regularly. It is absolutely vital that board members are reassured about the approach of the business and have a clear view of the risk it is under. They need to maintain focus on organisational strategy and its operational implementation, however, the strategy itself has become one of day-to-day, week-to-week or month-to-month survival as opposed to looking longer-term. For many boards, it is here that operational and strategic implementation meet most acutely. Overall, there is a huge sense from the board of needing to know numbers more than ever. For example, I am a trustee of a theatre and while it is closed you might think there is little to talk about, but I am speaking with the Director more now than I was when the theatre was fully functional. While these are extraordinarily challenging times and the support from the board is vital, there is also a danger of cutting across the freedom of operational responsibility which executives should have to run the business. As we move forward in this current climate, it is important to assure executives that this modus operandi is temporary and not forever, but how temporary we cannot say right now. The pressures facing senior leaders have been increasingly challenging, but those are amplified by about 300 per cent currently! They are trying to keep a balance of operational control with the moral underpinning and cultural values of their respective organisations. For those senior leaders the support of the board is essential to share that pressure. How board members, and the Chair in particular, can support the senior leader and other executives without getting in the way is what I am seeing boards wrestling with most significantly at the moment. Can you expand on how you view the role of a board during a crisis? I can see it becoming a much closer, constructive, critical friend role. It doesn’t help the executives to have a nervous bunch of non-executives who need more time and reassurance than ever before. They want and need constructive ideas and suggestions from the non-executives. This additional element to their role is generating a real hunger and interest amongst non-executives to know what their peers are doing and thinking to bring shared experience back to their organisations, where relevant. There is a much-heightened desire for engagement than I believe we have seen before. The critical element becomes very important when executives are under the enormous levels of stress that they currently are. We all know that under stress people can occasionally miss things, so an increased element of oversight is crucial. However, alongside the critical oversight, the friend piece is very important: at this point the isolation of the individual leader is reinforced hugely and the Chair needs to be someone to whom they can go and express their vulnerabilities and their concerns. We know from our experience with psychological profiling, and particularly the Hogan suite of tests that we use, that when under stress and certainly extreme stress, people can revert naturally to type unless they either consciously recognise it or somebody else helps them recognise it. Where we have been able to do psychological work with the executive team, it is helpful for the Chair to know how best to support the executive, and what works best for them. Some chief executives are best supported by a daily call, some are best supported by nothing but a weekly call and an occasional email to check in. In terms of the functioning and facilitating of a board, we are seeing almost every type of meeting happening virtually, even within Parliament and the Cabinet. In the aftermath of the lockdown, it will be a real question of how organisations will operate under a ‘new normal’. For boards this will be particularly acute, I believe. Typically there is a bias towards wisdom when appointing non-executive directors, an attribute generally recognised as something developed with age and prior board experience, the majority of people on non-executive boards tend to be in the upper age limit. As such, sheltering and social distancing measures will likely remain in place longest for these individuals therefore this group will be amongst the last to return to working in a ‘normal’ way. There will also be limitations on many for travel, both domestically and internationally which will further restrict physical attendance at meetings. It would seem to me that boards are going to have to meet virtually for some time, whether that be in whole or in part. One of the challenges this presents, and I don’t think we yet have full answers on this, is whether a move to virtual functioning is easier for a board that is already formed than it would be to create a new board or introduce new members. For many organisations there is a tradition of the non-executive collection having a board dinner together before a formal board meeting. How do you replicate that in some way? We hear of virtual drinks and of virtual dinners, but it isn’t quite the same. This is going to be an area that we will need to explore much further and work harder at. Are boards coming under more scrutiny in this current crisis? I think Chairs and Chief Executives up and down the country are very clear about which of their colleagues have stepped up and which have not. We are seeing more Chairs wanting to think about future succession to the board. Some will action it now while others will not feel they have the capacity to deal with succession planning until the immediate challenge of the crisis is over. There is also a shift we are noticing in terms of appointing non-executives at this time. There are Chairs and boards still willing to go forward with non-executive recruitment without being able to physically meet the individuals, but they want more assurances. To that end, we have developed a psychological profiling piece specifically aimed at non-executives. Previously this was not considered of huge importance, but as appointments to the board are now potentially going to be made through only virtual meetings it is incredibly helpful to know more about candidates. Particularly this piece can look at how people respond under stress which is hugely important at the moment. One area to consider is scrutiny of the viability of an organisation by both the board and future board prospects. This pandemic has emphasised the potential financial fragility of some organisations and to be on a board presents risks in a way it may never have done before. I do believe that there will be a substantial level of due diligence needed from existing and potential new non-executives in the future. Has remuneration been affected for non-executives during this time? There are circumstances where pay for non-executives is being reduced or cut, in the short term at least. For example, in family business or employee-owned business, where non-executives are prepared to assume an impact more closely aligned with that of the executive. In public companies we aren’t seeing board pay being cut yet. How are you working with clients to establish more diverse boards? As we have always done, we continue our work to better understand the diverse communities and the individuals within it. By and large, if you are a diverse candidate you don’t want to be labelled as such; you want to be treated as a candidate in your own right. We have outreach programmes and undertake research into the most talented individuals across a broad range of communities for example, we have just been shortlisted in the RIDI awards for the work we are doing with the UK Civil Service to establish a mentoring scheme to help support high-performing civil servants who have visible or non-visible disabilities. We then work to establish how can we get to know them, how can we help them prepare for board work and how can we advise them. This means we can bring them forward for a wider range of roles – not just for those positions looking for diverse candidates. We expect to provide diverse shortlists but on the basis of equivalent quality. So even if we are not being asked for it, we are going to continue to do that work both because we think it is morally right but also because it is a fantastic source of advice and talent that is otherwise neglected. As we move forward is there a greater demand for cross-industry experience at board level, than might have been the case previously? I am not sure there will be as much demand for this as you might expect. I believe that the pandemic has emphasised the need to really understand how the water flows through the pipes in the organisation that you are involved in. If you come into the business and you don’t know it, there needs to be a seriously good induction programme very quickly for you to be able to contribute. Do you think boards are well enough equipped to support the integration digital agenda as we move forward? The two things we continue to be most asked for in non-executive directors and trustees are financial acumen and modern digital understanding. In terms of the digital piece, many boards go through the loop of thinking they want or need somebody younger and more digitally aware. However when they meet the 28 year old digital entrepreneur, for example, they realise that (obviously with some great exceptions) very often that person will not be able to contribute as a full trustee on more than one item on the agenda. Boards needs someone who can talk across several areas, have depth in digital but offer breadth as well – a t-shaped experience and perspective. In terms of your board work at Saxton Bampfylde how are you adapting to virtual working within your board-focused activity? We are managing it well I believe. Our board practice has grown throughout the pandemic. We have actually seen a very positive outcome in terms of getting to know our candidates across more diverse communities than in the past. Everyone is at home and happier to chat, there is a sense of more time and space. I do fear that should it go on much longer people may become bored of this sole way of working and interacting, but just now people are happy to have the time and space to talk about their careers and to talk about how they want to lead their lives and move forward. I would say this is giving people the time to reassess what they want to do with their lives going forward. Some are thinking that they will travel less locally and internationally, not just in the short term but permanently. They have seen evidence that things can work virtually and that may become a more common change for non-executive roles in the future. However, one of the things we are noticing is that we are seeing fewer serious board reviews at this time. Maybe it seems like a luxury that can be put off, or maybe it is part of a cycle, but I do also believe that there are many Chairs who are actually taking time to reflect and looking at their individual board members and considering if they are fulfilling their duties or if they need to be replaced in the future. Everyone reacts differently to stress and some people are reverting to type, whether they be executive or non-executive. However, at the moment, organisations need their boards more than ever, and this is something that will have longer term impacts as we move forward. Succession planning is going to be key and my anticipation is that there will be a significant uptick and in demand for board reviews as the pandemic finishes. How much influence does, or should, a board have in making sure an organisation is high performing both at this point in time and more generally? I think the board should have very significant influence in determining the performance level across a whole range of metrics that they expect the executives to deliver to. I do think, even in the current climate, that they should leave it up to the executives to, by and large, decide how to get to that place. The board must always define the vision of where an organisation wants to get to and what kind of organisation it should be. This should be done in close collaboration with the executive, as they are the ones who need to move forward and implement it. Boards with strong cultures and high performance are those that are responding well and doing better than others right now. It is very hard to retrospectively impose a collaborative culture amongst the board and non-executives if it hasn’t existed before. Is there a particular style of organisation you think others could stand to learn from in this time? I would say family businesses have been comparatively well-equipped to handle the pandemic. Everybody is struggling, but historically family business boards have had a slightly closer relationship with the executives so that a shortened distance between the two functions was already in play anyway. Family businesses tend to be more cash positive and less reliant on external debt. They also tend towards being more risk averse and more agile than other types of organisation. I also think that because family businesses particularly have a longer-term horizon, the concept of stewardship for a future generation is easy for them to understand as that is what they have all lived with. Focusing on having a business that is sustainable in the long-term whatever the situation currently being faced is a more natural tendency for this style of organisation than for many other business structures. About the Author - Stephen Bampfylde is co-founder and Chairman of Saxton Bampfylde. He began his career working for IBM and Whitehall, where he spent nearly 10 years before moving into top level executive search. For 27 years he has been involved in the recruitment of executives to senior positions across all sectors.

What matters most to high net worth families is giving their wealth a purpose. What does it mean to be wealthy in the 21st Century? Are successful families around the world driven by wealth generation, wealth preservation or the application of their wealth? Withers recently commissioned a research study to find some first-hand answers to these questions. Through quantitative analysis of the attitudes of 4,500 individuals with more than US$10 million in personal wealth and a further 16 in-depth interviews with multi-millionaires and billionaires around the world, we wanted to investigate the modern meaning of wealth. Equally importantly, in the course of the research we have sought to identify the valuable lessons that families have learnt from their own experience which they would wish to share with other families facing similar challenges. The research has spanned three continents – Asia, Europe and the Americas – because we wanted to find out if individuals and families from different cultures really do have a different perspective and experience of wealth and have different lessons to pass on. The results have provided a fascinating insight into the changing dynamics of family wealth between generations and between continents. What characterises wealth-owning families today is a growing recognition of the importance of purpose when it comes to the creation, control and distribution of wealth. Across all cultures and generations, the sense is that wealth matters because of what you can do with it. The research, drawing directly from interviews with high net worth international families, has revealed that generational succession in wealthy families around the world has led to a fundamental re-evaluation of the purposes of wealth and family businesses. In the words of one interviewee, as they assessed their wealth: “The most important things are how you make it and how you distribute it. If you can do that in a way that is socially acceptable and keeps your family happy, then you are winning.” Withers partner Sarah Cormack comments: “For many wealthy families, we found that simply having large amounts of money to invest is not enough to provide purpose and cohesion to the broader family group. Having come to realise this, wealthy families are responding by re-immersing themselves in active business operations or (and, in many cases, also) putting their wealth into effect to effect positive changes in their communities.” “Maintaining commonly-held reasons for working together as a family is a continual process. It is brought under intense pressure when a family sells out of active business ownership and moves to a financial/investment-based footing (or back again). When a new generation is called upon to take ownership of the family wealth, there is a similar potential for it to unravel, as the younger family members bring their own values and interests to bear. Clearly, anything that creates coherence and harmony is valuable, and these days it appears to be the social application of wealth,” says Cath Tillotson of Withers’ research partner, Scorpio Partnership. The research established five key lessons that wealthy families have learned through coping with succession and working to preserve their assets and family unity, as illustrated through the points and quotes below: Transitions Are Complicated Whether selling a business, setting up a foundation or passing control of wealth to the next generation, families should ask themselves ‘why are we doing this?’ at each transitional stage to find the common objectives that keep them and the family wealth intact. “In Asia we have three generations living side by side… the hard business stuff has become the easy stuff, and the soft family stuff has become the hard stuff.” Take Your Time As a collection of individuals, and not an organisation, family businesses require a unique leadership style which should involve listening, learning, observing, sharing and understanding. “Family members often think they are unique, with the right skills, so you have to be willing to let go. Sometimes you have to be willing to lead from behind and recognise just because you can do the job, doesn’t mean to have to.” Leading With Principle Wealth ownership means that attention is trained on you. Family business heads should lead by example and the wider community will view wealth ownership with greater respect when it is used as a force for positive social change. “Values cannot be taught. You have to inculcate them through your own actions.” Recognise Your Limits Within a family business there are many roles to play; no single person can play them all well. Once skills, strengths and motivations are accurately assessed (including one’s own), other family members and professional advisers can be effectively appointed to fill the gaps. “As a leader you have to be open-minded and accept that other people are sometimes smarter and better than you… A business family has to be multi-disciplined and that means accepting outside help sometimes.” Giving The Next Generation Just Enough Each generation should be able to think of themselves as the first generation. This means that those in the next generation are given everything they need to be successful and no more. For those in older generations, this also means recognising when to step aside. “It is better to let children find their own way… If they want to come into my family business, they can, but they will have to earn their place, just like everyone else.” Withers worked with leading wealth research agency Scorpio Partnership, basing the research on 16 in-depth interviews with multi-millionaires and billionaires from Asia, Europe and the US . The opinions and experiences described by these individuals were cross-referenced against the attitudes of 4,500 individuals with more than US$10 million in personal wealth, who answered digital surveys on a wide range of subjects over the past two years.

Almost every family business that we have spoken to in recent weeks is being disrupted by the COVID-19 pandemic. Josh Baron and Ben Francois explain some of the preliminary results of a survey they launched that indicate that nearly 90% have seen some negative impact on their business. Some are fighting to stay alive or deal with a major decline in revenue. Others are dealing with greater demand and stressed supply chains. Most are feeling isolated as they make decisions that will shape their future. There are many great resources for businesses already available to manage the impact of the coronavirus. But family businesses differ from other companies in that their form of ownership gives them the ability to take critical actions that could help them through these difficult times. Family owners, who may or may not have executive roles in the company, have power that is often hidden or unappreciated. They have the right to change almost every aspect of how the company works: what it owns, how decisions are made, how success is measured, what information is shared, and how leadership is passed from one generation to the next. Through exercising their rights, family owners have the ability to position the company for long-term success or doom it to failure. Under normal circumstances these are powerful rights, which owners need to exercise thoughtfully. But in a business crisis, the power of owners is magnified. Unlike public companies, which typically focus on maximising shareholder value, family owners value objectives that usually go well beyond financial returns (e.g., family legacy, reputation). This crisis is forcing family businesses to make trade-offs among objectives that would have previously been unimaginable—all while dealing with the complex dynamics of a family. The stress, anxiety, and fear that come out in a crisis can amplify already challenging dynamics, paralysing decision making throughout the enterprise or causing conflict to spiral out of control. On the other hand, the crisis can be a call to action, causing family owners to ‘rally around the flag,’ put aside their differences, and take actions that allow the business to survive. Our survey shows a split between those reactions: 29% have seen some negative impact on family relationships, while 24% have seen a positive impact (the rest have seen no change). The ultimate impact of the crisis on your family business will be substantially shaped by how you, as owners, respond. Through the choices you make, or fail to make, the owners of a family business will affect how the crisis is managed by company leaders and what kind of company, if any, emerges on the other side. We will highlight five specific actions that owners need to take in order to ensure that company leaders – especially executives and boards – have the proper guidance and tools to respond to the crisis: 1. Define what type of family business you want to preserve. Which assets in the family enterprise must be maintained and where is there flexibility to sell or starve some parts to save the whole? Under what circumstances would you consider opening up ownership to employees, in-laws, or outside investors to bring in new forms of capital? Should you consider changing your model of family business ownership? At the heart of your family business are choices you have made about what you own together, who can be an owner, and how owners exercise control. Together they determine what it means to have a family business. You need to clarify whether any of these choices can be revisited or whether company leaders need to work within those constraints. 2. Review your governance structures and processes. Do you have the forums you need across the ‘four rooms’ of family, owner, board, and management? If you’re missing an important party during the crisis, how will you fill the gap? How will you make the major decisions you will be face? Are there certain decisions that the owners should be more or less involved in? Are you clear about who has authority to make key decisions? Do you need to revisit any policies you have set (e.g., dividend, family employment)? Or do you need to set new policies to deal with these unique circumstances? Managing through a crisis requires the ability to make major decisions faster than ever. Actions that might have seemed drastic several months ago can quickly become insufficient to meet the challenges faced by the company. Embedded in your family business is a way of working that may need to change. It’s up to you as the owners to ‘decide how you will decide’ during trying times. 3. Revisit your ‘owner strategy’ for the company. What values will inform your actions during the crisis? How will you make trade-offs among your stakeholders? For example, how do you prioritise the needs of employees (wages, benefits), customers (staying open, extending credit), and suppliers (paying bills)? Are there certain objectives for which you are willing to lose money (e.g., retaining employees, supporting the community)? Two-thirds of survey respondents say they have reduced or shifted operating expenses to preserve cash. Are you open to changing the company’s capital structure? Will you raise your borrowing limits if the company needs additional debt? Are you willing to recapitalise the company? Over 40% of the survey respondents are raising cash through new debt or equity. Will you reduce dividends? Around a third of survey respondents have cut them, or plan to. Owners have the right, and responsibility, to define what success means for the business. That involves making trade-offs among different objectives, financial and non-financial. Company leaders need to know what matters most to you so they can do their best to achieve it. 4. Use communication to sustain trusted relationships. How will you stay connected with each other, as well as the rest of the family? How will you remain informed about what’s happening at the company, as well as share your questions and concerns? What should be shared with employees about the state of the business and your commitment to it? How will you manage communication with the public and press, especially if tough decisions need to be made? One of the most valuable assets of a family business is the trusted relationships that are built over time with family members, employees, customers, suppliers, and the community. Trust requires transparency. Especially in a private company, the owners of a business control the spigot for how much information can be provided to stakeholders. Help company leaders determine what can be shared with each of your main constituencies. 5. Consider the implications for the transition to the next generation. Do current family leaders need to remain longer than planned to steward the family business? Or do they need to make way for fresh ideas and untapped energy? Should you accelerate current estate plans due to lower valuations? Or should you put them on hold because of the cost or distraction? How can you use this opportunity to teach future generations about your core values and principles? Family businesses that want to last for generations keep one eye on the present and the other on the future. In general, a crisis is a time to narrow the gaze. But it might also be the window in which to make changes that have been a long time coming. Company leaders will be looking to the owners to see to what extent transition plans need to be put in motion or on the shelf. There are no right or wrong ways to answer these questions. What’s important is that the owners, collectively, review each of these five areas and address the most important actions to take in each one to help the company leaders navigate the current crisis and prepare for the long term. Alignment is vital – companies with a unified ownership group can act decisively, while a house divided will not stand. We suggest you start by organising yourselves as owners to get the work done and stay aligned. How often will you meet? In what venue (in-person, conference call, video)? Who is in charge of setting the agenda and facilitating the meeting? Who else should be in the ‘room’ when you meet (e.g., company CEO or CFO, board chair, family office director)? In a crisis, the facts on the ground change rapidly. Owners need to find the right cadence that allows them to stay on top of the situation without overburdening the management team. On that note, 42% of respondents in our survey said they are more involved in decisions than they were before (less than 5% said they are less involved). Owners need to help business leaders by finding the most constructive level of involvement, which will likely be a balance of stepping in (‘all hands on deck’) and backing off (‘give us space to work’). Look for the places you should step up or back off. As you do your work, acknowledge the emotions and help each other through the ups and downs. Focus on your common purpose in getting the company through the other side intact. Staying together during the current crisis is essential to sustaining what you have already built. Families businesses possess financial and non-financial characteristics that allow them to out-compete other kinds of companies in normal and crisis environments. They are great employers, positive contributors to their communities, financially disciplined, and have committed owners. Productively harnessing the power of family ownership will help these vital companies to weather the current storm. About the Author - Josh Baron is a partner and co-founder of BanyanGlobal Family Business Advisers, and an adjunct professor at Columbia Business School. He is the co-author of the forthcoming Harvard Business Review Family Business Handbook (HBR Press, January 2021). Ben Francois is a Principal at BanyanGlobal Family Business Advisers, specialising in family business ownership strategy. This article first appeared on Harvard Business Review and has been reproduced with permission of the authors. Find out more by visiting the BanyanGlobal website here

The Walkers story begins in 1898 when the twenty-one year old Joseph Walker opened the doors of his own bakery with a loan of £50 and the ambition to bake ‘The World’s Finest Shortbread’. In the first year of business, Joseph used every spare moment to perfect his shortbread recipe. It was time well spent. Soon, shooting parties from the local estates were making detours just to visit Joseph’s bakery. As word spread and demand for his quality shortbread increased, Joseph took the first steps to expanding the business by moving to a larger shop in the Speyside village of Aberlour and investing in a horse and cart to deliver his baking further afield. 1930-1950 / The War Years During the 30’s, the business – like Joseph’s family – was expanding. Two of his sons – James and Joseph – joined the company, bringing fresh ideas with them. By 1936 they had introduced three valuable additions to the Walkers setup: a range of cakes, a selection of confectionery and…the company’s first delivery van. Now that Walkers produce could be sold at ever-greater distances the prospects for expansion were looking promising. Then came the war. Wartime rationing and their commitment to the Home Guard meant that Joseph’s sons couldn’t develop the business or their range of products as they would have liked. Despite these adversities, however, they kept the business going and their customers happy by supplying them with the same tasty breads and oatcakes to which they had become accustomed. 1950-1970 / From Aberlour to Harrods While some manufacturers began to cut corners by using margarine instead of butter, Joseph believed that people still appreciated the care that went into making a superior product like Walkers shortbread. And he was right. That’s why, even after Joseph Walker died in 1954, his sons knew better than to alter a winningly simple recipe consisting of just four ingredients: flour, sugar, salt and that pure creamery butter. As demand grew so did the business. By 1961, all three of James’ children – Joseph, James and Marjorie – had joined the company, making the third generation of Walkers working for the family firm. The workforce was now almost one hundred, and Walkers had a fleet of 14 vans as well as shops in Grantown and Elgin. Local grocers began stocking Walkers products, and the family had to invest in bakery machinery to help them meet demand. Naturally, they baked to the same high standards, simply on a larger scale. Soon their shortbread was on the shelves of fine food stores all over Britain. By the 1970’s, Joseph’s grandchildren had begun exporting Walkers shortbread to over 60 countries around the world – all of it still baked to his original recipe, of course. 1970-1990 / Growing Success By 1975 Walkers had outgrown their extended bakery and moved to a custom built factory. This gave us the extra space and facilities needed to develop new products such as our delicious Chocolate Chip Shortbread and speciality biscuits. Many of the people who worked for Walkers during this time are still with us today; most are local folk who often come from the same family – mothers working alongside daughters, fathers and sons. Community values have always been central to life in the Scottish highlands and the same is true of our business. Now, as a hundred years ago, Walkers test every new product in Aberlour’s village shop. Though today our customers are based all over the world, our products are still given their first seal of approval by the villagers of Aberlour. That way we can ensure that each cake and biscuit offers a real taste of Scotland. 1990-2008 / Delivering Goodness Whether it’s enjoying one of our traditional varieties or new products like our luxurious almond, ginger and chocolate covered shortbread, Walkers’ reputation has continued to grow as new customers the world over discover the quality of our baking. This has been recognised by industry over the years too, with Walkers picking up numerous international accolades including five gold Mondiale medals and the Food from Britain Innovation Award. 2008 – Present Day Much has changed since Joseph Walker baked his first batch of biscuits over a century ago. But, although we’ve updated many of our methods and are constantly adding exciting products to our range, some things remain a constant; Joseph’s grandchildren and great-grandchildren have always remained true to that original ideal – to bake ‘The World’s Finest Shortbread’. In fact, when the family opened another factory at Elgin to produce their popular new range of shortbreads and biscuits, it was only on the condition that they would continue using the finest ingredients: plump fruits, aromatic spices, chunks of real chocolate and wholesome nuts. Find out more by visiting www.walkersshortbread.com

The Marinelli Pontifical Foundry is Italy’s oldest family business and among the three oldest family businesses worldwide. Campane Marinelli foundry has a very long history; the first bell was made around the year one thousand and since then their work has been a long sequence of success and honours. One of the most significant honour that the foundry can boast, is the possibility to use the Papal Arm Coast in their production; it was Pope Pio XI in 1924 to grant the privilege to the foundry. Campane Marinelli foundry, considered to be the oldest foundry in the world, is located in Agnone (Agnéune in the local dialect), a small Italian town of 5,200 inhabitants in the province of Isernia in Molise. The Marinellis have been handcrafting bells since 1000 AD, and current co-owners, operators and brothers Armando and Pasquale Marinelli are the 26th generation to run the business.

The story began in 1972 when John and Barbara Dunning, local farmers, set up Tebay Services in partnership with local bakers when the M6 cut through the Lune Gorge. It was the first and is still the only family run motorway service station on the UK road network – a small 30 seat café serving home cooked, locally sourced food. Forty years on and they are still there, still family owned, still farming and still with a fierce passion for, and a pride in, their landscape, their people, their environment and its products. In 1976 the Tebay Services Hotel opened, five minutes from the services. With its deep pitched roof reminiscent of mountain architecture, open log fires, real ale, a restaurant that serves home-cooked food and wide, sweeping views over the surroung fells, it has been welcoming weary travellers from far and wide ever since. Over the next 10 years, a Caravan Park and Truckstop joined the fold. In the year 2000, they opened a 90,000 square foot visitor attraction hidden under a grass roof on the edge of the Lake District. Today the Rheged Centre is home to a gallery, shops and cafés plus an IMAX-style cinema screen that regularly streams world-class opera, ballet, theatre and music events from around the globe. So the innovation continued. 2004 and back to Tebay where the family’s farming roots inspired the creation of two farmshops followed four years later with butcher’s counters promoting a ‘nose to tail’ approach to butchery – beef and lamb produced on the family farm, sold and butchered at their butchery units or cooked and served in their kitchens, ensuring that the use of local produce was as sustainable and accountable as possible. Ultimately, this is a family that know that if they stand still they start to move backwards. While they celebrate and are inspired by their heritage and roots, like generations of hill farmers before them, they understand that to survive and ultimately to thrive, they must continue to innovate, keep their ‘family’ and community close and always believe in what they do. Take a look at the inspirational story behind the making of the business that is all about the place, Westmorland.

The Walkers story begins in 1898 when the twenty-one year old Joseph Walker opened the doors of his own bakery with a loan of £50 and the ambition to bake ‘The World’s Finest Shortbread’. In the first year of business, Joseph used every spare moment to perfect his shortbread recipe. It was time well spent. Soon, shooting parties from the local estates were making detours just to visit Joseph’s bakery. As word spread and demand for his quality shortbread increased, Joseph took the first steps to expanding the business by moving to a larger shop in the Speyside village of Aberlour and investing in a horse and cart to deliver his baking further afield. 1930-1950 / The War Years During the 30’s, the business – like Joseph’s family – was expanding. Two of his sons – James and Joseph – joined the company, bringing fresh ideas with them. By 1936 they had introduced three valuable additions to the Walkers setup: a range of cakes, a selection of confectionery and…the company’s first delivery van. Now that Walkers produce could be sold at ever-greater distances the prospects for expansion were looking promising. Then came the war. Wartime rationing and their commitment to the Home Guard meant that Joseph’s sons couldn’t develop the business or their range of products as they would have liked. Despite these adversities, however, they kept the business going and their customers happy by supplying them with the same tasty breads and oatcakes to which they had become accustomed. 1950-1970 / From Aberlour Yo Harrods While some manufacturers began to cut corners by using margarine instead of butter, Joseph believed that people still appreciated the care that went into making a superior product like Walkers shortbread. And he was right. That’s why, even after Joseph Walker died in 1954, his sons knew better than to alter a winningly simple recipe consisting of just four ingredients: flour, sugar, salt and that pure creamery butter. As demand grew so did the business. By 1961, all three of James’ children – Joseph, James and Marjorie – had joined the company, making the third generation of Walkers working for the family firm. The workforce was now almost one hundred, and Walkers had a fleet of 14 vans as well as shops in Grantown and Elgin. Local grocers began stocking Walkers products, and the family had to invest in bakery machinery to help them meet demand. Naturally, they baked to the same high standards, simply on a larger scale. Soon their shortbread was on the shelves of fine food stores all over Britain. By the 1970’s, Joseph’s grandchildren had begun exporting Walkers shortbread to over 60 countries around the world – all of it still baked to his original recipe, of course. 1970-1990 / Growing Success By 1975 Walkers had outgrown their extended bakery and moved to a custom built factory. This gave us the extra space and facilities needed to develop new products such as our delicious Chocolate Chip Shortbread and speciality biscuits. Many of the people who worked for Walkers during this time are still with us today; most are local folk who often come from the same family – mothers working alongside daughters, fathers and sons. Community values have always been central to life in the Scottish highlands and the same is true of our business. Now, as a hundred years ago, Walkers test every new product in Aberlour’s village shop. Though today our customers are based all over the world, our products are still given their first seal of approval by the villagers of Aberlour. That way we can ensure that each cake and biscuit offers a real taste of Scotland. 1990-2008 / Delivering Goodness Whether it’s enjoying one of our traditional varieties or new products like our luxurious almond, ginger and chocolate covered shortbread, Walkers’ reputation has continued to grow as new customers the world over discover the quality of our baking. This has been recognised by industry over the years too, with Walkers picking up numerous international accolades including five gold Mondiale medals and the Food from Britain Innovation Award. 2008 – Present Day Much has changed since Joseph Walker baked his first batch of biscuits over a century ago. But, although we’ve updated many of our methods and are constantly adding exciting products to our range, some things remain a constant; Joseph’s grandchildren and great-grandchildren have always remained true to that original ideal – to bake ‘The World’s Finest Shortbread’. In fact, when the family opened another factory at Elgin to produce their popular new range of shortbreads and biscuits, it was only on the condition that they would continue using the finest ingredients: plump fruits, aromatic spices, chunks of real chocolate and wholesome nuts. Find out more by visiting www.walkersshortbread.com

The Marinelli Pontifical Foundry is Italy’s oldest family business and among the three oldest family businesses worldwide. Campane Marinelli foundry has a very long history; the first bell was made around the year one thousand and since then their work has been a long sequence of success and honours. One of the most significant honour that the foundry can boast, is the possibility to use the Papal Arm Coast in their production; it was Pope Pio XI in 1924 to grant the privilege to the foundry. Campane Marinelli foundry, considered to be the oldest foundry in the world, is located in Agnone (Agnéune in the local dialect), a small Italian town of 5,200 inhabitants in the province of Isernia in Molise. The Marinellis have been handcrafting bells since 1000 AD, and current co-owners, operators and brothers Armando and Pasquale Marinelli are the 26th generation to run the business.

For many years, partly as a result of their portrayal as ‘ma and pa’ lifestyle businesses, family firms have not been recognised for the true contribution that they make to the UK economy. In the current economic climate, family firms are being looked upon much more favourably not least because of their underlying values, plans for the future, longevity and desire to succeed. The contribution they make should not be under-estimated either with significant jobs being provided, communities being supported and the fact that family firms are truly the backbone of the British economy. So what makes working with family firms special and ‘Why do big corporates and PLC’s like doing business with private family businesses? Paul Andrews, Founder and Managing Director or Family Business United sums it up in three areas: 1 – Leadership From The Front First and foremost, family firms tend to be headed up by someone who has the family business in their blood, and as such doing business with someone who takes personal pride and ownership in their business makes them desirable to work with. Rather than simply doing business, family firms make it personal, traditional values such as honesty, integrity and personal service comes to the fore. No longer are you doing business with an organisation per se but a business that is owned and very often managed on a day-to-day basis by someone that cares about their business, and appreciates that delivering good, consistent customer service is key to driving the business forward. To that end, family firms provide a good relationship base with access to the key decision makers who are happy to engage with clients. 2 – A Sense Of History And Purpose Secondly, family firms have a history, tradition and legacy and tend to be around for the long term. Recent research done by Family Business United identified the ten oldest family firms in the UK and collectively they have been trading or over 4,200 years, no mean feat in the current climate and they have survived world wars, recessions and more besides. Family firms tend to plan for the future and are able to adapt and evolve to ensure the business survives. As the business transcends the generations there is a desire to succeed and pass a successful organisation on to future generations, and as such this can offer customers in the corporate world more security about who they are doing business with, and assurances that the business is in it for the long term. 3 – Because It Is Personal Thirdly, it is personal. Brand, name and reputation mean everything, especially when it is ‘your name above the door.’ Many family businesses have been around for generations, take the Warburtons, The Goring Hotel, Floris, JCB and Kinloch Anderson for example, and the family name is associated with everything that the business stands for. To that end, corporates know that they are dealing with a long established brand, one with values that permeate the organisation, and one with true values underpinning the work that they do rather than ‘corporate words, mission statements and meaningless charters.’ Family businesses are renowned around the world for being outward looking, in it for the long term, willing and responsive to change and sustainable and as such represent excellent business partners, many leading the way in their respective markets. Family firms represent more than 5 million firms in the UK economy, provide 12 million jobs and make up nearly half of all mid-sized businesses in the UK (£20-500 million turnover). Far from being small ‘lifestyle businesses’ families are behind some of Britain’s best known and loved brands and you may find that you are already working with some of them.

R J Balson Butcher provides great tasting West Dorset and Somerset meat from local farms less than 30 miles from their shop in Bridport. The business is over 500 years old and is currently run by the 26th generation of the family, Richard Balson, and is the oldest butcher and the oldest direct lineage family firm in the UK today, dating back to when in was founded in 1515. Paul Andrews spoke to Richard to find out more. What does your family business do? We are a retail family butcher based in Dorset and the oldest family owned butcher in the UK having traced our heritage back to 1515. How did you get involved? I was born in to the Butchery craft and I guess the outcome was inevitable really. What did you want to be when you grew up? I wanted to be a footballer but was not good enough. What are your first memories of the family business? Skinning rabbits at the age of 7 years old with my father. What values are important in your family/family business? Offering great service to the public with pleasure and pride. What is the best thing about being a family business? You are in control of your own destiny. You only get out what you are prepared to put in. And the worst? Unnecessary paper work, although this is probably the same for all businesses having to deal with the vast volume of red tape! What is the best thing about your working day? Looking forward to servicing my customers. What is your proudest family business achievement? Being recognised as not only the oldest, but being one of the best in our occupation. Is there a next generation waiting in the wings to take over? Yes, but when the time is right. What do you see as the biggest challenge facing family businesses? Staying ahead of the competition of the supermarkets. What words do you associate with family businesses? Top quality, personal service and commitment to customer’s requirements. Words of wisdom – What piece of advice would you pass on to someone thinking about joining the family business? Be prepared for long hours, plenty of hard work and you will reap and enjoy the benefits of being your own boss in control of your own destiny.

Hiring non-family executives helps ensure longevity, but it requires strategic finesse. In this article, Morten Bennedsen from INSEAD explains more about why next-generational succession is one of the main challenges facing family businesses globally today. Owner-managers who are confronted with this issue often have to turn to professionalising the family firm by bringing in outsiders. The process of professionalisation – transitioning from a founder-led company into a management-led organisation – is meant to enable founders to focus more on their core competencies. But it is very difficult to get right because it touches on emotional issues that non-family firms never have to confront. It can also lead to some unexpected consequences, as the story of Zhang Gang, the founder of the franchise-based restaurant chain Little Sheep, demonstrates. A Good Shepherd Born in China’s Inner Mongolia, Zhang turned a relatively unknown Mongolian lamb-based, hot-pot dish into a mainstay of Chinese cuisine in the early 2000s. Little Sheep quickly became a franchise group with hundreds of outlets. To attract and incentivise key people, Zhang shared the ownership with long-term employees and franchise owners who deeply respected his leadership. Although Zhang was still in control of the business following five years of rapid growth, Little Sheep counted more than 50 owners who were committed to building the franchise. Without the dedication of the non-family managers, Zhang could not have grown Little Sheep into the powerhouse that it became. He started a process that went from a one-man band to a full symphony orchestra. For many founders like Zhang, embarking on the professionalisation process is absolutely essential for the survival of the family firm. If family members are not available to take over the management of a fast-growing private firm, founders have no other choice but to recruit non-family managers externally. By professionalising the executive suite, founders can free up their precious time to expand the scope of their leadership and vision. They can focus on big picture questions to overcome roadblocks, by adopting new business strategies, starting new investment projects, making long-term plans, restructuring capital assets, conquering new markets or relocating production to other regions. Beyond The Next Gens By placing the operational side of the business in the hands of competent professionals, founders can ensure that their families and firms survive at least until a family member is ready to take over the top job. Having a long-term succession plan in place, even if it means skipping a generation, can make a company far more credible in the eyes of employees, customers, suppliers, investors, bankers and other stakeholders. During the professionalisation process, the core family values can also be transformed into an organisational culture that adds depth to recruitment, training and retention of talent. In addition, the more a founder can convince the next generation that the firm is managed like any other professional firm, the more likely family members will feel committed to playing an active role generation after generation. Professionalisation of the family firm can also attract investors such as new owners, bankers and venture capitalists in the public-equity markets. Three Key Elements Below are some of the key elements of the professionalisation process: 1 – Recruit non-family managers to the executive suite, while encouraging them to make decisions that are in line with the founder’s vision. By providing incentives to non-family managers, founders can benefit from their commitment to best practices. 2 – Develop strategic leadership whereby founders develop a two-pronged approach to management: For family members: Finding the right roles and jobs for current family members and next gens, so that the firm can continue to benefit from the interaction of generations. For founders: Taking less of an operational role and more of a strategic role in order to take the company to the next level. 3 – Empower the board by ensuring that the directors are fully engaged in the selection of non-family managers. In so doing, founders avoid the risk of destabilising the board when the time comes for the directors to function in the absence of the current chairman. By hiring non-family executives, founders can put themselves in a strong position to communicate their strategic vision, objectives and goals while infusing the family spirit into the organisation. Stakeholders can then stay focused on the operational and strategic direction in which founders are trying to take the company. Most founders have handled the professionalisation process by moving out of the executive suite and into the boardroom as chairman, while some have ultimately sold their businesses to outside investors. In fact, Little Sheep’s Zhang was one such founder. Having diluted his share of the ownership, he could no longer run the business the way he wanted it to be run. To avoid conflict with the board, he decided to sell his stake so that the business could survive and continue satisfying its customers. Its current owner Yum China has continued the business in pretty much the same way that the founder would probably have. In that sense, Zhang’s values live on. This article was first published on the INSEAD website and has been reproduced here with their permission.

The ability to carry on a successful intergenerational transfer of ownership and leadership (succession) is one of the most important issues facing a family business. This issue is plagued with conflict, and accounts for the majority of engagements with family business consultants. Succession has often been called the final act of greatness. How ideal for a family business founder to have his or her creation live on long after they are gone. Most family businesses do not have a successful transition of ownership from the founding generation to the second generation. Studies have generally agreed that about 30 percent of businesses transfer to the second generation, while only 10 percent to 15 percent successfully transfer from the second generation to the third generation. Only four percent manage to stay in the same family in the fourth generation. The majority of family firms want to keep the business in the family and pass it on to the next generation. The American Family Business Survey in 2002 found that 85 percent of the firms surveyed wanted to continue with family ownership. A family-owned business is more likely to fail due to lack of a succession plan upon the founder’s illness or death than for reasons having to do with competition or market forces. One survey reported 77 percent of failed family businesses that declared bankruptcy did so after the death of the founder. Many family business researchers agree that the primary underlying reasons for failed successions are a lack of effective decision making and a lack of proper planning. Often the failure to plan is caused by an entrenched owner who cannot concede power or will not tolerate a reduction in personal authority, responsibilities, or control. The reasons for this scenario are numerous and can be quite complicated from a psychological perspective. Often, the previous generation simply does not want to be put out to pasture. If they are the founders of the business, they often feel the company is their “baby” and their identity is closely interrelated with the company. Others equate retirement with death and simply do not want to discuss the issue. Of the CEO respondents to a large nationwide study, nearly one in seven reported they would never retire! This causes much consternation in the family, especially among the next generation members. The next generation waiting in the wings wonders when they will ever get their chance to lead. Awareness of the life cycle stages becomes apparent when initiating conversations regarding succession. Research has shown that at certain ages, the relationship of the founder and the successor can be either rife with conflict or relatively smooth. This is especially relevant with a father-to-son generational transfer. When a founder is in his relatively young 40s and 50s, and the successor is in his 20s or early 30s, the role conflict can be at its worst — and most visible. The current familial roles of each family member in their respective life cycles present barriers to effective communication and to efficient working relationships. If a founder is in his 60s or 70s and the successor is in his 40s, the competition and conflict typically is less, resulting in a more positive working relationship. There is often significantly less conflict between a father and daughter, and transfers of leadership can be very smooth between opposite genders. Reproduced with permission from Keanon Alderson and The Press-Enterprise Keanon Alderson Ph.D. is an associate professor in the Robert K Jabs School of Business, at California Baptist University in Riverside CA. His book “Understanding the Family Business” was published in 2011. He can be reached at kalderson@calbaptist.edu