The ascension of Ana Botin to head up the Spanish banking giant following the death of her father Emilio was a text-book case of how to handle a modern succession. Ana will now be the fourth generation of the family to lead the bank. So how did the Botins do it? And what are the lessons for other families?
For a start, it helps that the business is well run. Even during the darkest days following the banking crisis of 2008 Santander never returned a quarterly loss. A focus on retail banking and geographical diversification served it well, and the group plans to push into Poland and the US.
Also, the bank is good to its shareholders. The dividend yield is currently around 7%, and early last year topped 10%. (HSBC’s is currently under 5%, and Spanish rival BBVA’s hovers around 3.5%.) This no doubts helps assuage any shareholder worries about the family’s power, which is large given that they own just 2% of the shares,
Secondly, Ana’s rise is a sign of continuity, not disruption. “She has been groomed for this role over a long period time and seems to have the full buy-in of both the board and the shareholders,” says says Juliette Johnson, a family business advisor. “She wasn’t nepotistically parachuted in to the role. She has built up her own credibility over time, outside of the shadow of her father.”
Ana was always keen to distance herself from the fact that she was the heir apparent, always referring to Emilio in meetings as “el presidente”, rather than “my father”. He, for his part, didn’t shy away from taking her out of the front line following a failed foray into investment banking in the 90s to ensure a merger with Banco Central Hispano went through. (She later took over BCH’s retail banking operation.)
Despite her ups and downs, Ana has worked for the Santander group for 26 years, following eight years at JP Morgan. Unlike a new CEO who might want to shake things up, she radiates stability in a sector that is still volatile. “Not only does she have the skills and experience for the role but she also deeply understands the culture and values of the organisation as well, which is incredibly important,” says Johnson.
A common problem when one family member is crowned successor is the effect it has on their relatives. “After succession the family won’t be the same,” says Professor Josep Tàpies, a family business expert at IESE business school in Barcelona. Because it was clear for a long time that Ana had been chosen over her five siblings, any problems have presumably been played out already. Because the succession came as a result of a death, Santander does not face the old leader looming over the new one’s decisions.
Prof Tàpies adds that the lessons from Santander by no means apply to all successions. “You pay attention to what stage the business is at: is it at the founder stage? Is it a sibling partnership? A cousin consortium? A corporate? The right transition will be different at different points in the company’s evolution.”
So the lessons from Santander are valuable, but limited. And while Santander’s story might seem enviable, it goes against the grain of the received wisdom for family firms these days, especially large, complex, multinational ones. Most experts say that the family should step back to an ownership role and leave the running of the business to a professional chief executive, something which worked well at Lego, for example.
Obviously there are exceptions. Axel Dumas at luxury firm Hermes, Yanick Bollore at French advertising company Havas, and Victor and Richard Li, sons of Hong Kong property magnate Li-Ka Shing, seem to be doing well, to name just three. Of course their – like Ana Botin’s – succession plans began a long time before the current management theory came into vogue.