The responses of the world’s largest family businesses to the Transformative Age
The 2019 EY and University of St Gallen Global Family Business Index provide significant insights into the world’s largest family-owned businesses, ranked by revenues. This year we see little change in the geographical distribution of the FB500, although there is a substantive rise in Germany-based firms and a slight reduction in American firms. There is a significant increase in the number of technology firms making the Index.
New entrants this year tend to be younger, smaller, and more likely to be publicly listed. For the first time since the index was published, we see data on board composition and characteristics. Both new and existing firms have boards comprising a majority of non-family members. Most board members are male and diversity at the board level is lower than the Fortune 500. However, the total revenue represented by these 500 family firms has grown by 9.9% over the last Index, compared to 8.6% in the Fortune 500, underlining the success of family-owned firms in their ability to compete effectively.
To that end, use the index to select a new entrant and conduct an evaluation on the drivers of rapid growth and innovation. One common assumption is that Family Businesses take a long-term view to innovation and growth and therefore are risk-averse and slow to innovate. This can be argued both ways- Therefore the task is:-
Prepare a 1500 word with a one-page summary brief for the senior executive team for one of the leading firms that were founded between 1610-1798. They are keen to decide to be more aggressive in their innovative approach, involve more non-family members as well as go public. As one would imagine they are skeptical and would need data to support and guide their decision-making.
To that end, you are required to provide some insights into the following:-
- Are family businesses slow on the uptake of innovative processes and rapid growth- if so, why, and how can this be mitigated.
- How can they involve non-family members without upsetting the balance within the family business? At what level would you recommend- For example- at the management or at the Board Level
- Based on the family business index and other resources – evaluate the growth of traditionally owned family businesses and their entry onto the index [Explore the material on the site for your initial insights}
The Family Business Index:-
https://familybusinessindex.com