Learning from Family businesses

World’s largest family businesses (87%) have clearly identified where the responsibility for succession planning lie.

  1. Take a look at succession planning and gender diversity policies of family businesses, for playing a bigger n more strategic part in firms.
  2. Succession planning to be an ongoing process – adequately train and prepare your successors for both ownership and leadership succession – reasonable time period 3 years.
  3. 15% of business board of directors should have voting powers.
  4. 70% of those voting members should be engaged in the business. 25% of these voting members may not be engaged in day-to-day business activities (Independent directors).
  5. Board of directors should meet formally face-to-face 6 times a year.
  6. Unhealthy Conflict resolving – identify hidden issues, regularly talk with members on what’s going on in the business.
  7. Another aspect of people management in which family businesses are shining in is gender diversity.
  8. Have women in the C-suite and groom for leadership positions – at least one woman on their board. Consider a woman for next CEO position.
  9. No Gender bias – Consider a woman for their next CEO. Encourage women members to join the board, by creating welcoming and inclusive environment.
  10. Have Board of Directors for strategy, directions, and governance.
  11. Establish governance – Mission statement, Governance agreement, Bye-laws, Family charter, and Family constitution.

Communication and cohesiveness levels among leaders are commendable among family businesses.

  • Have regular shareholder meetings to discuss business issues. Care deeply about one another.
  • Have regular shareholder meetings to discuss business issues.

Branding – be known as a Family business. It builds cohesion, differentiation in the market, and enhances customer loyalty.

CSR – Involve in Philanthropic activities (money and time). Establish a family foundation.

Expect and accept more spending on Cyber security.

Family businesses are vital to the global economy – account for more than two-thirds of all companies globally, count many leading household names among their number and provide 50% to 80% of all employment. There is a clear picture emerging of what it takes to succeed in the long term: care for the family allied with first-class corporate governance and practices. – Peter Englisch, global and EMEIA leader, EY Family Business Center of Excellence.

The characteristics and practices of large, long-lived family businesses serve as a model for other family businesses as well as other companies that aspire to maintain an entrepreneurial spirit, innovate and grow consistently – Joe Astrachan, PhD, professor of management and entrepreneurship, Kennesaw State University.

Join us at Pathfinders to know more on implementing these initiatives.

Suresh Shah, Pathfinders Enterprise

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