Family Business Leadership Enquiry
1st January 2008 Paul Andrews
Insights and observations of a select panel of family business leaders and experts on the complexities of culture, strategy, family and governance in the family firm. These issues are illustrated by stories and examples of leadership challenges, method
All organisations require leadership. In family firms the leader is the protector of the culture, the conduit for innovation and the focus of vision and values. The challenge of the role is unique in the family context, yet leadership is one of the most important but least understood topics in the family business field.
This Inquiry was convened to shed light on its complexities, gathering the thoughts and experiences of a select panel of family business leaders and experts through a series of extended roundtable discussions. The Report summarises the insights and observations of the panel in our three sessions: culture and strategy, family, and governance, and in each area derives lessons for the field.
The first thematic session draws out the unique attributes of family business leadership, the strategic challenges and how to maintain a powerful and effective firm cultural identity. Several issues are highlighted: The importance of emotional intelligence in leadership, family-non-family collaboration at the top, forms of shared leadership, and culture-building activities. In relation to strategy, the role of outside perspectives is a key issue. The discussion continues into the realm of ownership and financial arrangements, and how to incorporate mechanisms that prevent them from becoming a source of controversy and conflict.
The second session looks at family issues as a source of unique advantage to business culture and success, and yet also a notable hazard in many firms. The discussion encompasses ways for leaders to stay in touch with the front line, the challenges of specific kinds of family relationships, and how to handle retirement and succession with confidence. How best to engage and prepare the upcoming generation whilst maintaining a genuine meritocracy also features. The discussion moves into the issue of balance in the key leadership roles of chairman and CEO, how to sustain teamwork between family and non-family, and how conflicts can be best managed.
The third session discusses measures firms may take to give leadership its best chance to succeed, such as governance and ownership arrangements, remuneration, recruitment and the use of advisors. The emerging theme is that no one size fits all, which entails a need for continual adaptation of the governance system. The role and ideal qualities of the non-executive board member and what is best practice in making the system work, are discussed. The discussion moves on to issues to do with equity, transparency and the key role of advisors.
Download the full report below