The story of the CGMA report Managing the challenges of family businesses starts in Singapore. Have you thought about doing something on family businesses?, asked Yogi Thakker, one of CIMA’s Global Corporate Relations Managers. We’ve got lots of them in Asia and it could be very useful.
I then went along to a governance forum where the Chairman of one of the UK’s leading family businesses explained their challenges - when they are good, they are very very good, he argued, but when they are bad, they are dreadful. This piqued my interest even more and I went on to discover quite how important family businesses are to the UK economy. This was completely at odds with the commonly-held view here in the UK that families dominate the scene more in countries like Germany, Spain and Italy.
The die was cast when my new joint venture colleagues in the US expressed enthusiasm about some work on family businesses. We’ve got lots in the US too, they said.
But here is what we found out. Despite the fact that family businesses are prevalent everywhere in the world as my story above makes clear, they attract relatively little attention in management literature. And yet, they face some pretty big challenges. To some extent, these are the same as any other organisation – remaining ahead of the competition and achieving long-term success. But they also need to navigate such issues as family dynamics and succession planning. We’re seeing the problems this can cause in some very famous Asian businesses where the now-elderly founders are having to hand over the reins to the next generation. According to one report, the gossip columns are rife with stories of Asia’s top corporate families feuding over the family fortune and succession. So our report looks at the key advantages and disadvantages of family businesses and how some of the challenges can be addressed.
We go further by looking at some of the issues faced by a finance professional working in such a business who is not a family member. Research shows that the finance person is often the most senior non-family member within the company and is highly valued as an impartial advisor. The report provides six tips for the finance professional to thrive in a family business, for example, it’s important to maximise the benefits of your professional and experience gained elsewhere, to build trust through your technical and management knowledge combined with professional independence and objectivity.
So whether you are a member of the family or not, you will find useful advice on how to make your business succeed.