Here at CMG, we’re delighted to see more being written (and acknowledged) in recent years about the importance of family businesses around the world. We even published our own independent research in 2015, highlighting the significant impact of Canadian family businesses on our economy.
Two pieces in recent weeks have caught our attention.
First, in March, Family Capital – an online publishing company dedicated to the family enterprise sector – published (together with PwC) its latest ranking, based on annual revenues, of the world’s top 750 family businesses.
It’s an intriguing list, particularly during the current coronavirus pandemic. Together, these families generate annual revenues of more than $9.1 trillion and employ nearly 31 million people around the world. We’re especially pleased to see 18 of Canada’s own families in this year’s ranking. They include names like McCain, Rogers, Thomson, Watsa, Sobey, Desmarais, Weston, Bombardier, Shaw, Hasenfratz, Saputo and others.)
[Note: In order to qualify for the ranking, the family or group of families must control at least 50% of the voting shares in a privately-held company and at least 32% of the voting rights in a publicly listed company.]
This latest ranking even introduces comparative market capitalization data to show how publicly-listed family businesses are faring during the first few months of COVID-19. Although it’s premature to draw any firm conclusions on the underlining health of these family businesses, the comparisons give an early indication of the relative strength and resilience of many of them – and the importance of their families remaining united.
Which brings us to the second piece, A Crisis Playbook for Family Businesses, published a week ago by the Harvard Business Review. In it, the authors, Josh Barron and Ben Francois, lay out five broad themes from a survey of business families – including strategy, family communication, governance, trust and transition. They’re themes many families are focusing on with particular urgency during the pandemic.
And they even highlight a potential opportunity for families right now. From the authors:
“Unlike public companies, which typically focus on maximizing shareholder value, family owners value objectives that usually go well beyond financial returns (e.g., family legacy, reputation). This crisis is forcing family businesses to make trade-offs among objectives that would have previously been unimaginable—all while dealing with the complex dynamics of a family. The stress, anxiety, and fear that come out in a crisis can amplify already challenging dynamics, paralyzing decision making throughout the enterprise or causing conflict to spiral out of control.
On the other hand, the crisis can be a call to action, causing family owners to “rally around the flag,” put aside their differences, and take actions that allow the business to survive.”
CMG is privileged to support many of Canada’s most accomplished business families in enduring for the long term – through any market conditions – and we look forward to seeing their businesses not only survive their current challenges, but continue to thrive in the years to come.
And here’s A Crisis Playbook for Family Businesses.