Family Owners and/or Managers?

by John L. Ward

52% say that the next generation will be owners and managers
24% say next generation family will own but not manage
7% are currently owned by family but not managed by family

A recent survey[1] by PwC discovered these succession plans. They also learned that 25% will transfer ownership in the next five (5) years.

There are some interesting questions:

  • How well does non-managing family ownership work?
  • What is the role of the non-managing family owners?

We don’t’ know if non-managing family ownership works better or worse. But we have learned much about what family owners do:

  • Set the Vision and Values;
  • Establish the Owners’ Goals;
  • Design the Board;
  • Communicate Other Family Expectations – the Family Constitution;
  • Add Value by Supporting the Management and the Culture Whenever Possible.

We also offer this advice to family owners: “nose in, fingers out.”

[1] The survey was of more than 1,000 family businesses with a median size of $200m and a median firm age of 55 years.

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