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Family Business & Sustainability Webinar Presentation
The document discusses the role of family business boards in achieving sustainable impact, highlighting their significant contributions to the global economy and employment. It emphasizes the importance of clear governance structures, values, and inter-generational communication to foster sustainability and address challenges in balancing family interests with business strategies. The forum addresses critical competencies and lessons from successful family-owned companies to ensure their long-term viability and positive social impact.
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Family Business & Sustainability Webinar Presentation
- 1. Success across Generations– Leading Family Business Boards with Sustainable Impact
- 2. © All rightsreserved by Boards Impact Forum Success across Generations – Leading Family Business Boards with Sustainable Impact
- 3. Ø Introduction –Jakob Stengel , Board Member Boards Impact Forum Ø Family Business Boards Sustainable Impact – Fellow INSEAD Ø Moderated discussion with panel of top level Chairs & Owners Ø Conclusion & Next © All rights reserved by Boards Impact Forum *Share on social media #BoardsImpactForum #ClimateGovernance *Questions via Q&A where our Operations Director Cecilia Wideback West will help handle https://boardsimpactforum.com/joinus/ www.linkedin.com/company/boards-impact-forum www.twitter.com/ImpactBoards Success across Generations – Leading Family Business Boards with Sustainable Impact
- 4. The Boards ImpactForum © All rights reserved by Boards Impact Forum The Nordic chapter of the Climate Governance Initiative, in collaboration with World Economic Forum. The purpose is to engage board directors in Nordics and internationally, to accelerate climate actions and innovation for sustainable business and a sustainable world. Surveys with report feedback will be shared June 30, 9-10 CET Sustainability Leadership, A Swedish Approach to Transforming your Company, your Industry and The World; with Board View – In collaboration with Climate Governance Initiative Malaysia August 26, 12-13 CET Competence for Strategic Sustainable Business
- 5. Introducing our presenter ©All rights reserved by Boards Impact Forum Martin Roll INSEAD Distinguished Fellow Strategy, Leadership & Transformation Expert Senior Advisor to Fortune 100, Asian Firms, Family Businesses & Family Offices Former Senior Advisor, McKinsey & Company Author of “Family Business Strategy” (2021) and “Family Office Strategy” (2021) INSEAD MBA (D’99) www.martinroll.com Linkedin: https://www.linkedin.com/in/martinroll/
- 6. Success Across Generations:Leading Family Business Boards With Sustainable Impact Boards Impact Forum 27 May 2021 www.martinroll.com
- 7. The blurry linesof family business
- 8. Family-owned companies • Themajority of the world’s companies are family-owned (75-85%) • Family companies account for 70% of the global GDP • 60% of global employment • Strong entrepreneurial drive • Next generation are emerging • 10.000+ family offices (50% created since 2000) • A force for good: Philanthropy and social impact The power and influence of family- owned companies
- 9. ”Wealth shall notpass three generations: The first generation build wealth, the second manages it, and the third generation destroys it.” Chinese proverb
- 10. Business Family business strategydependant on three drivers Clear roles, responsibilities and guardrails can help drive sustained success Family • Shared values • Cultural patterns & myths • Communication clarity • Conflict management • Decision making • Rules, roles and relationships • Values & beliefs • Past, present & future Owner Family Business • Purpose & strategy • Structure & systems • Organization & culture • Compensation • Technology • Business processes • Risk & rewards Ownership • Purpose of ownership • Stakeholders value • Stewardship • Ownership distribution • Governance & board • Legal & regulatory • Longevity & succession Source: Adapted from Tagiuri & Davis (1982)
- 11. Strategy: Key challengesto be addressed Blueprint for alignment of family business and inter-generational interests Family ▪ Long-term aspirations ▪ Family grows faster than the business ▪ Family grows apart in values and interests ▪ Development of next generation leaders in business, family and society Ownership Business portfolio Family office Impact ▪ Definition of essence of the partnership ▪ Design of liquidity and decision making mechanisms ▪ Inheritance ▪ Tax and legal implications ▪ Corporate strategy – short, medium and long-term ▪ Alignment of family, owner and corporate strategy ▪ Portfolio renewal vs. family traditions and risk averseness ▪ Diversification and liquidity ▪ Role in overall family eco-system and business portfolio ▪ Family offices policies ▪ Investment policies ▪ Effective governance and management ▪ Fundamental objectives ▪ Strategy, governance and supervision ▪ Values & ethics ▪ Hybrid investments, social impact and others
- 12. Model: Family businessstrategy Aligning the complex eco-system Purpose Business Portfolio • Management • Strategy & innovation • Portfolio management • Capital & Resources • Culture • Risk & rewards Family • Legacy, Heritage & Values • Brand & Reputation • Family constitutions & policies • Family councils • Family services • Next Gen dev. Ownership • Purpose of business • Roles as owners & Stewardship • Shareholder & Legal structures • Longevity & succession Impact • Foundations • Philanthropy • Third-party programs • Social impact • Partnerships Family Office • Investment strategy & Asset allocation • Wealth mgt. • Portfolio • Governance & Risk management • Next Gen Academy • Family services Strategy Strategy Strategy Strategy Financial Stakeholders Brand & Reputation Leadership Risk & Governance Succession & Next Gen
- 13. Dilemmas in balancingbusiness and family 1. Growing the business with a long- term perspective • Family interests dictate business strategy (diversification to accommodate family members?) • Corporate strategy overrides family interests (can lead to family conflicts and exit of family members from business) • Business grows slower than family talent (not enough positions to employ family members) • Business grows faster than family talent (pressure on family members to join and outside professionals may be required) 2. Ensuring family harmony and welfare
- 14. Sustainability and familyfirms • The sustainability implications from perspectives of stewardship, family values, long-run orientation and managerial agency costs are quite positive and have merit • Perspectives relating to conflict, private socio-emotional wealth, and principal– principal agency may pull in negative directions • Family values and educational backgrounds, governance arrangements, organizational factors, and environmental forces all may have important mediating roles to play • Some family firms will be exemplary corporate citizens, others will not No simple answers about the relationships between family firm ownership, management and organizational context and the tendency for family firms to engage in sustainability initiatives Source: Adapted from “Family firms and practices of sustainability: A contingency view” Journal of Family Business Strategy (2016)
- 15. ”What I likeis that you are a soul behind the brand. I think it is something that is common to the family brand: The passion and the special investment of the people in the family.” Vitalie Taittinger, Marketing & Comms Director (4th generation family member) Champagne Taittinger (France)
- 16. • xxxxx ”When nextgeneration encounters resistance to impact investing from older relatives it is often resistance to change. When young, relatively inexperienced members of the family try to dictate the investment strategy, usually the older generation feel they don’t have the credibility.” Liesel Pritzker Simmons Blue Haven Initiative (family office)
- 17. “Only while sleepingone makes no mistakes.” Ingvar Kamprad Founder, IKEA
- 18. Family business system:Governance structure Chairman Family Assembly Family Council Shareholders Meeting Shareholders Council Board of Directors Next Gen Academy CEO Management Family Employee Council Advisory Board Family Office Family Committees
- 19. Get board rolesand dynamics right Diversity of thoughts, competencies and experiences key to sustainable impact Leader Operational supporter Human capital steward Service provider Critic Business partner Coach Strategist Program coordinator Strategic partner Employee champion Facilitator Gardener Competency practitioner Knowledge facilitator Enabler Advocate Disrupter Internal consultant Change agent
- 20. Traits of effectivefamily business board members • Understanding and care for family and its legacy • Interest in the company and enthusiasm for its purpose • High ethical standards, integrity and reputation • Willingness to say “no” to the CEO • Open-mindedness • Objectivity, independence and an “outside-in” point of view • Strategic thinking, analytical, problem solving • High sensitivity and integrity to conflicts of interest • Support and advice on planning for CEO succession • Smoothing the transition to the next generation • Mediating in ownership stake/ reallocation discussions • Planning and advising on exit strategies Balance past, present and future Proximity to family owner(s) but keep integrity Succession and ownership are constant concerns Beware of cultural differences Catalyst for sustainability & impact
- 21. “That’s what separatesus from non family-owned businesses. It’s the concept of sustainability, which (I’m glad to say) is much in favour at the moment. And this sustainability is lived by the family.” André Hoffmann (4th generation) Vice Chairman, Roche
- 22. New management booksin 2021
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- 24. Your perspective? © Allrights reserved by Boards Impact Forum www.menti.com Key benefits for a Family Business to impact sustainability and long-term value creation?
- 25. © All rightsreserved by Boards Impact Forum
- 26. © All rightsreserved by Boards Impact Forum
- 27. © All rightsreserved by Boards Impact Forum
- 28. Introducing our panelists ©All rights reserved by Boards Impact Forum Board Member Ahlstrom Capital Holding Companies, NED at Broman Group & Westas Chair Ambea, Leos Lekland, Pharma Relations, NED Max Burgers INSEAD Distinguished Fellow Senior Advisor
- 29. Thanks to allPresenters, Advisors & Partners © All rights reserved by Boards Impact Forum Thanks to our Presenters & Panelists Martin Roll Lena Hofsberger Peter Ahlström Thanks to The Audience Operations Committee & Board Ø Service based on a business model supported by sponsorships and grants. We extend our deep gratitude to our Partners:
- 30. Next at theBoards Impact Forum © All rights reserved by Boards Impact Forum Join more International CGI events & tips of other events when signed up as member Answer Survey and get reports – Corporate Renewal and Sustainability, Remuneration June 30, 9-10 CET Sustainability Leadership, A Swedish Approach to Transforming your Company, your Industry and The World; with Board View - In collaboration with Climate Governance Initiative Malaysia Henrik Henriksson CEO Scania >CEO H2 Green Steel, NED Electrolux, Elaine Weidman Grunewald, NED Sweco, European Sustainable Growth Acquisition Corp, former Chief Sustainability Officer Ericsson August 26, 12-13 CET Competence for Strategic Sustainable Business Lise Kingo, NED Sanofi Arne Karlsson, Chair, NED Mette Morsing, Professor, PRME UN Compact, NED Sign up as member or supporter https://boardsimpactforum.com/joinus/ Follow www.linkedin.com/company/boards-impact-forum www.twitter.com/ImpactBoards