Successful business families regard their ownership of the business as a fundamental asset serving a common purpose of the family as a whole, writes Jurgen Geerlings.
The aim of the present generation is to transfer the ownership to the following generation in a good state.
This attitude, which is fundamental to the "responsible ownership" concept, can result in a solid and stable ownership structure that reinforces the longevity of the business.
But what, specifically, do you need to do in order to be a responsible owner? Here are seven steps that, if discussed in an open and professional way, will cultivate a family's individual notion of responsibility and commitment.
- Understand the particular responsibilities of being an owner: The main responsibilities of an owner are: the maintenance of a strong identity of both family and business; the maintenance of a fruitful business culture while making family values operational; the cultivation of a long term vision; and the development of a sustainable ownership strategy.
- Utilise the benefits of being an owner: Ownership should have a stimulating and enthusing effect. Family owners are part of and contribute to a distinguished community. They make a strong distinction between "value" and "values" enjoying the pursuit of tangible and non-tangible results.
- Demarcate the role of the owner: In a more complex situation of a growing business with an extended family and multiple assets that have to be managed besides the business, it is wise to make a clear distinction between the role of the owners and the directors.
- Manage how the family organises itself and its relationship with the business: Both family and business pursue their own life cycle. As a result, the relationship of the family with their business should be revised periodically. Conflicts of interest must be managed by means of a governance structure in which the family has a clear and well-defined position.
- Cultivate an entrepreneurial spirit: The business will be the primary environment in which the entrepreneurial capacities of individual family members are developed and tested. As ownership diversifies within the family, entrepreneurship will gain a broader meaning that will benefit the business.
- Educate family owners: The designing and updating of an educational programme for family owners is an important precondition for a sustainable relationship between the family and its business. It will take some effort and professional help will be needed, but the benefits will be clear.
- The upbringing of the children in the next generation: Children are the potential heirs and successors. In the end, they will make the difference between success and failure. Besides being taught family values, one of the most important things they need learn is how to balance the individual and the common interest. Both parents and senior family members should act as role model on this issue.
Being a "responsible owner" is the underlying shared motivation of the individual family owners who want to pursue their business and who possibly want to fulfill alternative family goals. What's more, it helps to create a strong commitment from the family towards the business and other family assets and activities.