Cooperation encouraged

Tarja Valde-Brown is senior communications consultant and deputy managing director at Eurofacts Oy, a Finnish public affairs and communications agency operating in the Baltic Sea region.

FBN Finland was established in Finland during the spring of 1997 after years of deliberation. Before its establishment, ideas, feedback and experiences were sought from elsewhere. Concern in regard to the future of family businesses and a desire to share experiences were the main reasons for the organisational effort.

In the spring of 2002, FBN Finland turned five years old. The goals and areas of activity-related emphasis have taken shape substantially since the early days. The basic purpose remains the same, however: there is a wish to affect the future operating environment in such a way that it guarantees the continuation of family entrepreneurship in Finland.

The position of family enterprises has not always been easy in Finland. Entrepreneurship has been belittled and gaining wealth from entrepreneurial activity has attracted censure. The establishment of FBN Finland is a sign that times have changed. Family businesses, proud of their commercial operations, have gone public.

Though firms operated by families have always been the backbone of Finnish society, the founding of this association set into motion the consolidation of the official position of family businesses as a part of the community. Family firms are now "included" and listened to.

And as over two-thirds of all Finnish companies are controlled by families, they are significant employers. The depression experienced in Finland at the outset of the 1990s also taught Finns the lesson that a family operation represents a secure place of employment, which looks after its employees. Thus, concern over their future should be taken seriously.

Founding fathers
The founding of FBN Finland was initiated by a handful of people. One significant person was the late Peter Fazer, Chairman of the board at Oy Karl Fazer Ab, who undertook, on the part of private companies, the wish for mutual cooperation and joint action. Pivotal individuals as initiators included Klaus Sohlberg, Chairman of the board at Oy GW Sohlberg Ab, LJ Jouhki, Chairman of the board at Thomesto Trading Yhtiöt Oy, and Honorary Mining Counsellor Krister Ahlström, Chairman of the board at A Ahlström Oy.

According to the results obtained from initial queries, family businesses wanted more interaction with each other and more effective lobbying on behalf of their interests. They also wanted a common forum by which experiences concerning ownership and family entrepreneurship could be shared.

The enterprises that campaigned for the establishment of this network had been engaged in the activities of FBN International and had attended IMD's family business training programmes. This education, coupled with meetings, provided favourable occasions for exchanging experiences among similarly motivated people with the same problems.

Speakers acting on behalf of family enterprises – Fred Neubauer, John Davis and Alden Lank – also visited some Finnish family companies to tell them about the progress being made in familial cohesion, ownership, management style and company transfer to descendants. An extra boost to establishing the association was the networking experiences provided by Great Britain's Unquoted Companies Group.

FBN Finland's inaugural meeting was arranged in Helsinki on the final day of May 1997, during which 49 family businesses registered as network members. In July 2002, the total number of member firms reached 151.

Lobbying and member acquisition
The areas of emphasis in activity during the first years rested in the initiation of operations as well as the identification and positioning of the association in Finnish society, together with the inter­national cooperation between family enterprises. A basic aim was to realise the expectations of the membership and to bring in new family businesses.

Gradually, training and research also began to be emphasised within the operations. The reinforcement of interest group contacts, consolidation in the promotion of interests and lobbying at the EU level as a member of GEEF took on significance.

Functions are currently organised into four committees – lobbying, publicity, training and research, and the young generation. The focus of each committee changes on an annual basis. Committee effort has made FBN Finland's operations vibrant and vigorous, as people are involved in the activities in different ways and on various levels.

"The position of the lobbying committee has become central to FBN Finland's operations," declares Anders Blom, General Secretary. "Before we launched the active promotion of interests, there was a complete lack of owner perspective in social discussion. Finland's relatively harsh inheritance and gift tax laws required personal action on the part of family firms." He continues: "Change-of-generation questions represent one of the most pivotal concerns in the operations of the network."

"Though our membership numbers are high, internationally speaking, we want to further encourage Finnish family businesses to join as members of FBN Finland," says Klaus Sohlberg, Chairman of FBN Finland. "Through growth in our membership, we'll be able to increase our importance in social discussion and influence. The matters we achieve progress in benefit all family enterprises, including those that are not yet network members.

"It is hoped that all who benefit from what we are striving to realise might join with us and participate in our operations  –  so there will be no 'free passengers'."

Succession takes priority
Sohlberg reckons that practically all matters expected to rise to the fore during the years to come in FBN Finland's activities are already within the knowledge of the association. The correct emphasis, however,  needs to be found.

"Campaigning for things that benefit the entire membership is crucial, in my view," says Sohlberg. "Even if the protection of ownership interests is important, the role of doing things together and training should not be downplayed. Their share within the operations should be maintained. Personally, I'd raise the matters connected with succession taxation as the most pivotal of all. If we are able to obtain a breakthrough, we'll be able to secure the continuity of family enterprises."

In December 2000, the government of Finland approved alleviations respective to inheritance and legacy taxation in accordance with the aims of FBN Finland. "The present regulations are not yet sufficient," states Sohlberg. "They focus mainly on firms in which ownership is concentrated. It's an unusual old family enterprise that is set up this way. Our goal is for change-of-generation tax relief to take the holding period of ownership into more effective consideration – ownership based on long-term commitment.

"For example, if the assignor has owned the shares of the company for 15 years and the assignee keeps the endowment for over five years, tax relief should also apply in these cases. This does not discriminate in any way against full-class firms. At the same time that there would be tax-related incentives for the surrender of ownership – for change-of-generation company transfers – other connected matters would come to the fore."

Ownership with a face
"Personally, this network has been an important forum for me in which I've been able to bring out some of my own thoughts and campaign for matters I regard as important," confides Sohlberg.  "It's great to notice that questions that have been going round in my own mind – even for decades – are the same as what many other family entrepreneurs are dealing with. This association has consolidated a process for businesses in which openness is growing all the time."

The work proceeds in many spheres, however. Though numerous significant accomplishments have occurred during FBN Finland's existence, and the position of family companies as well as appreciation for them have risen considerably, new areas of concern are always rising from within our contemporary society.

"A great deal of work still has to be done regarding the importance of and appreciation given to family firms," muses Sohlberg. "It isn't eased by the trend, particularly in the Nordic welfare states, by which the traditional family concept is being threatened. More and more families are being maintained by only one parent.

"Though we've received official status in the Finnish community – a token of which is, among other things, the mention of family businesses in the current programme of government – political decision-makers should internalise more effectively the importance of 'ownership with a face' in business operations, both as an employer and as a pillar of society.

"Only in this way can respect for family enterprises grow in Finland and the EU. I believe the significance of family businesses will be emphasised when we are able to engage in a real dialogue on values and when the idea of ownership with a sense of responsibility further emerges."