Exceptional Magazine : 2015 Exceptional Magazine
62 Exceptional Australia 2015 employingmorethanhalfofAustralia’sworkforceFamilybusin es sesarethehearto fo ureconomy... In the initial stages of kicking off a business, being efficient, identifying new channels and all the business basics are front of mind. Soon after, ideas need to be fed, so access to capital and teaming up with people who can help you scale are critical. As you become more successful, thoughts eventually turn to succession planning and managing the wealth that’s been created. Family businesses that continue to prosper from one generation to the next often do so because they have robust governance structures. Despite this, many family businesses have not given enough thought to governance. They rely too much on a carefree attitude toward issues such as succession, ownership and management, and they wait until one of these issues becomes an unavoidable problem before attempting to deal with it. Often that is too late and the business suffers as a result. Some of the more common governance problems that can arise within family businesses are: • Succession and the business’ dependence on its owner. Family business owners are often the leaders of their business. But they are also a potential risk through their failure to plan for succession or to relinquish control when it would benefit the business to do so. • Internal family conflicts. Internal conflict between family members can, at its worst, disable a company. The assets of the business can often be abused by family members for their own personal benefit. • Nepotism. This can undermine professionalism in the business and discourage non-family staff. • Tunnelling. This refers to a situation in which family owners create a complex set of ownership structures that undermine non-family minority shareholders. This can ultimately damage the business’ efficiency. There are also likely to be concerns about how the family interacts with the business, including who can or cannot be a shareholder, limiting shareholding to bloodline family members and understanding the different classes of shares. Family governance: issues and challenges creating an economy of $4.3 trillion of businesses making up more than 70% of the world’s largest family businesses are EY clients. Before these issues erupt to threaten your family business, talk to EY. 80% We are now offering more services for family businesses in Australia, including succession planning, governance and other family office services. Headed by Richard Boyce — himself a fifth-generation family business leader — EY’s family office services help families plan for their future, as well as their business’. Contact Richard Boyce, Oceania Head of Family Office Services, at email@example.com for more information.
2016 Exceptional Magazine
2014 Exceptional Magazine