Australian family firms have certainly produced some larger-than-life businesspeople. Gina Rinehart, the wealthiest person in Australia, owes her fortune to Hancock Prospecting – the mining company founded by her father. She is consistently in the national, and often international, headlines for her anti-environmental business agenda and support for lower wages. This is in addition to her on-going, and very public, feud with her children over the governance of the family trust that manages the family’s wealth.
Rupert Murdoch, one of the world’s most powerful media tycoons, inherited his very first titles – two regional newssheets in Adelaide, South Australia – from his father. He now owns several national newspapers including the The Australian, the Wall Street Journal in the US, and The Times in the UK, plus dozens of regional titles. His support, or lack of it, can make or break a politician’s career. Although Murdoch is now at the head of a global firm and gave up his citizenship in 1985 to become a US citizen, it all started in Australia.
Shopping centre chain Westfield Group is another Australian family business that has gone international. Founded by Czechoslovakian immigrant Frank Lowy in the 1950s, it now has more than 100 sites across Australia, New Zealand, the US and UK. Lowy’s sons, Peter and Steven, now run the company. The firm has kept the Lowy family on Australia’s BRW Rich 200 list every year since it was first launched in 1983.
In terms of pressing issues facing Australian family firms, only one in three businesses consider themselves succession ready. This is despite the fact two-thirds of incumbent family business leaders are over 50 years old, and 20% are over 65. According to Kosmas Smyrnios, professor of family business entrepreneurship at Melbourne’s RMIT University, family business owners are increasingly concerned the younger generation are not interested in taking on a leadership role within the firm. As a result, 40% of family firms indicate a non-family manager will replace the current chief executive.
Retaining control of the business in the future is a primary challenge for 67% of families, with more firms setting up formal boards before multiple generations and greater numbers of shareholders make ownership more complicated – 44% in 2013 compared to 39% in 2011. Although they still feel neglected, the government recently commissioned a report into the role family businesses play in the economy, perhaps signalling greater government support for these firms in the future.