In my last article published in October 2023, I raised the issue of external directors by saying they could either be independent or not. It’s not a question of how much they’re paid, as some people think: it’s far more complex and multidimensional than that. Let’s start by clarifying these two concepts. External versus independent […]
8 pillars of a professional board of directors
Robust corporate governance systems in family firms shouldn’t be any different than those in well-managed non-family firms – at least in theory. In practice, it’s another story. Boards of directors in family businesses have adjacent psychological and psychosocial dimensions, and disregarding these dynamics can easily lead to tensions among board members. During my tenure as […]
Other things that tend to happen in family firms
In my previous post, I highlighted two of the most common mistakes in family businesses. To avoid going on about mistakes, I’ve decided to entitle this post “Other things that often happen in family firms.” To be sure, lots of good things happen in family firms. My colleague, teacher and friend, Prof. Miguel Ángel Gallo, […]
Two of the most common mistakes made by family-owned firms
In my last post, I offered five strategies that family firms should follow if they have hopes of long-term survival. Today, the focus is on two of their most common mistakes, which can also make life much more complicated for their top leaders. (1) Bringing family members into the fold It’s not unusual for founders […]
5 essential rules for overcoming challenges in family firms
As I explored in a recent article published in the Harvard Deusto Business Review, prosperous family businesses owe their success to adhering to the following five essential rules: 1 – Treat the business as a business and the family as a family 2 – Foresee changes to avoid surprises 3 – Implement structures for nearly […]
Succession, the monumental question
The topic of succession has a long history and has never been limited to the exclusive domain of family business. Putting it into perspective can give us a deeper understanding of its importance in all organizations, both family- and non-family-owned. After writing this post, I thought it was perhaps more suited to an academic readership, […]
Family business and globalization
My colleague Prof. Marta Elvira asked me if I could write about family business and globalization. I do so with pleasure but with the fear that some readers might find my conclusions disappointing. In this post, I won’t refer to large corporations but to medium-sized companies, defined by the European Union as firms with revenues […]
Do we have an ownership strategy?
In our 2012 book Genesis of the Board, José María Navarro-Rubio and I explore the concurrence of three distinct spheres in family-controlled firms – ownership, business and management – which business owners must address in parallel. First is the ownership strategy, which outlines the owners’ vision in terms of the type of company they aspire […]
Types of shareholders in family-owned firms
Family-owned businesses, especially later-generation firms, are supported by different types of stakeholders: shareholders, investors and owners. There’s a fourth category – speculator – that I’m omitting since it’s not worth mentioning. In my view, there is no wealth creation derived from speculation, which moreover, rarely occurs in family firms. So what are the differences between […]
Institutional configuration in family firms: the board of directors
Like all companies, family-owned businesses require initiative, power and financial resources in order to excel. For those that aspire to transition from firm to institution, however, additional structures and processes are needed. While no one is immortal, institutions are born to transcend generations. They don’t depend on the will or whims of one specific person […]