The 500 largest family businesses in the world are vital to the health of and are growing faster than the global economy. Collectively, they generate US$8.02 trillion in revenues and employ 24.5 million people worldwide across 47 jurisdictions, high enough to be the third largest national economy by revenue, behind only the US and China. These and other findings were published today in the 2023 EY and University of St.Gallen Family Business Index, which is a ranking of the 500 largest family businesses in the world by revenue, and issued every two years.
Longevity and stability continue to be a staple among the companies listed on the 2023 index, as more than three-quarters (76%) have been around for more than 50 years, and nearly one-third (31%) are more than a century old. This is further reinforced by their board structures, with almost one-quarter of all board seats (23%) being held by family members and nearly half (45%) having family members as CEOs.
While most companies in the index are based in Europe (46%), the US is the leading individual jurisdiction (24%). Overall, exactly half of all the businesses in the index are located in Europe, Middle East, India and Africa (EMEIA), with the Americas home to 34% and Asia-Pacific housing 16% of companies in the index.
The contribution of Asia-Pacific has been consistently increasing ever since the first edition of the index in 2015, from 12% to 16% this year. Meanwhile, regarding industry sectors, consumer-based family enterprises lead the index (37%) thanks to their dominant share in the Americas. Companies in Advanced Manufacturing and Mobility follow (29%) as this sector is in the lead in EMEIA and Asia-Pacific.
Even though successful family enterprises are recognized for being agile, innovative and purposeful, there is still a ways to go with gender parity. Globally, around 6% have a female CEO, and women hold only 23% of all board seats. North America and Europe stand out on the index with female CEOs but still only around 7%. When it comes to the distribution of board seats among family members, Europe leads the way with women occupying 25% of family-held board seats, considerably above the global average of 20%.
Helena Robertsson, EY Global Family Enterprise Leader, says: “Family-owned enterprises continue to show an impressive ability to adapt quickly and I applaud them for their continuous transformation and innovation. As we anticipate a potential slowdown in global economic growth for the year ahead, the long-term perspective of these companies and the desire to further a legacy will be critical drivers for maintaining resiliency and ensuring a strong succession plan is in place. I especially look forward to seeing how the next generation will further focus on investing in technology and diversifying the face of boards while maintaining significant contributions to the global economy.”
Thomas Zellweger, Professor from the Center for Family Business at the University of St.Gallen, says: “The overall composition Index is stable, with only 7% new entrants this year, proving the resilience of family firms. The growing prominence of Asia-Pacific companies is also striking and a sign of the economic power these family-owned enterprises wield in the region. It will be interesting to observe how these long established firms continue to adapt and prosper in light of social, environmental, economic and technological change. The role of the next generation in tackling these challenges will be absolutely critical.”
Analysing the results from a UK perspective identifies 13 British owned family firms included within the index in 2023. As Paul Andrews, Founder and CEO of Family Business United explains, “It is great to see some great British family firms continuing to be represented in the index, many of them household names that will be familiar to many of us. Collectively they employ over 354,000 people, have traded for over 870 years and generate annually $87 billion in turnover.”
“These family firms individually and collectively are great examples of the importance of family firms to the UK economy in terms of their overall contribution in terms of income generated, jobs provided and wealth created, not forgetting the significant impact that they have in the communities in which they operate too.”
The leading UK family businesses in the 2023 Family Business Index are:
- Wittington Investments Ltd (ranked 97th globally)
- Pentland Group PLC (ranked 235th globally)
- James Dyson Ltd (ranked 250th globally)
- Arnold Clark Automobiles Ltd (ranked 281st globally)
- European Metal Recycling Ltd (ranked 283rd globally)
- Frasers Group PLC (ranked 289th globally)
- JCB (ranked 307th globally)
- Bestway Group (ranked 325th globally)
- Westcoast (Holdings) Ltd (ranked 378th globally)
- Laing O’Rourke Corporation Ltd (ranked 391st globally)
- T.J. Morris Ltd (ranked 405th globally)
- Rigby Group (ranked 406th globally)
- Boparan Holdings Ltd (ranked 481st globally)
Find out more about the Family Business Index here