Beyond The Fifth Generation
10th June 2017 Paul Andrews
The Ahlström family are one of Finland’s most significant industrial dynasties, with a tradition of entrepreneurship and philanthropy that goes back 165 years.
Their most prominent achievement was founding the Ahlstrom paper company back in 1851, which is now (without the umlaut) one of the world’s largest and most successful fibre-based businesses. Thomas Ahlström is Managing Director of Antti Ahlström Perilliset Oy, the Holding company in Finland and looks at how they have gone from a ‘family business’ to ‘business family’ in Finland.
The family own Antti Ahlström Perilliset Oy, a private holding company, which in turn is the largest shareholder in Ahlström Capital Oy, a private investment company managing around €1.5bn of investments in industry, real estate, and forestry.
So how have they done it? Thomas Ahlström is a fifth-generation member of the family; we asked him the secret of their success. “We have always been a very tightly knit family,” he says. “That’s definitely part of it. We spend a lot of time together, and we share a strong sense of social belonging and pride in our heritage. And we’ve always worked hard to ensure we have the right governance measures in place, both for the business and the family.”
The key, he believes, is to get governance in place before it’s actually needed. “You don’t want to be trying to put measures in place in the midst of a dispute. You need the framework in place to deal with issues before those issues arise, and then you need to adapt it over time as the landscape changes. After five generations our family has over 300 members – that needs a very different governance structure to a family of ten or twelve. That sort of challenge is what attracted me to the job I do now, but I got it on merit not because of my name – as a member of the family I was contacted to see if I would be interested, but after that it was the same recruitment process as for everyone else. And it was a very rigorous interview!”
Good governance is vital, but it’s not enough on its own. “You need strong and visionary leadership, and you need to be looking ahead to each new generation to find it. We invest a lot of time in succession planning, and we have a four-year development plan for our next generation, and find opportunities for them to get work experience in our subsidiaries.”
Another shared Ahlström family belief is the value of a strong and diverse Board. “You need a wide range of skills and experience, as well as a balance between men and women, and older and younger members. Knowledge of the industry is a prerequisite, of course, but there’s a special perspective that the owners can bring as well. People who have real money invested in the business. And alongside them the independent directors who bring their own expertise, and the ability to challenge both the business and the family. In a good way.”
It’s a model that has survived and thrived since the middle of the 19th century, so what does Thomas see in the 21st? “One of the main reasons I took this role was to help keep the family and the business together and see us through to a sixth generation, and in the meantime make this one of the world’s best family companies from a governance and succession point of view. That’s my goal.”
About the piece - This feature forms part of the PwC Global Family Business Survey 2016, a piece of research that interviewed over 2,800 representatives around the world. It has been reproduced with permission of PwC. Click here to see the full results of the survey and other features.