Good insight into the evolving recognition of family firms and the fact that focusing on the long term view can provide great benefits too.
Family firms are becoming more appreciated and recognised for their contribution but as this piece in the FT concludes, the more success and achievement that is recognised, the more they will come under the media spotlight. Having said that, increasing governance and frameworks to professionalise the family firm help to create a pathway to success. Add to the mix the fact that successful family firms are entrepreneurial and innovative, strive to add long term value and do not rest on their successes of the past, family firms are well placed to succeed for generations to come, even if that does come with more scrutiny.
Family-owned companies used not to get much respect, when they were noticed at all. Many public companies have dispersed ownership and are managed by professional executives, who are handed financial incentives to perform, and are kept under pressure by activist shareholders. When many family businesses make the news, it is often because of disputes among relatives, such as the bitter tussle between the Ambani brothers in India, or when the next generation at companies such as News Corp struggle to show they can match the founder or leader. But things are changing. As the tenure of chief executives decreases and the clamour from hedge funds for short-term returns increases, doubts are growing about whether this is the best way to build a company’s long-term value. Meanwhile, despite their image of being cautious and inward-looking, family-owned businesses on average perform well.