Coutts Bank reveals family business ‘secrets’
New report highlights factors that determine success in family firms
Coutts Bank says it has found out the secrets to succeeding as a family business after publishing study involving data from more than 300 family firms.
Apart from the ups and downs of growing a company, family-run businesses must also conquer the emotional distractions, and occasional feuds, associated with such a close-knit type of commercial organisation.
A key issue drawn out by the study is succession and Coutts Bank says it is important to draw a distinction between management and ownership when businesses are passed on.
Other troublesome issues highlighted in the report include choosing between siblings for leadership roles, treating children fairly and not equally, incentivising non-family members and balancing personal and business relationships.
Mark Evans, head of family business at Coutts, said: “Family businesses have been taking governance seriously for centuries, but they have the added complexity of an additional group of stakeholders: the family itself.
“We have outlined the key issues surrounding governance in family business and provided guidance based on real life experiences. Family businesses that take the time to work out what is right for the family as well as the business can significantly improve the odds of successful succession.”
In further findings from the study: 62% of larger family firms have no non-executive directors on their board, three in 10 said they have a ‘constitution’ and more than half separate the roles of chief executive and chairman.