The three archetypes that make good non-family CEOs

Photo by gldburger/iStock / Getty Images
Photo by gldburger/iStock / Getty Images

What makes a good CEO of a family business can be difficult to predict,  but the executive search firm Egon Zehnder reckons that good non-family CEOs are likely to be one of three different types of business managers.

The often dominant role families play in running businesses of all sizes has sometimes mean that choosing a non-family CEO isn’t easy. From the family’s perspective, there are issues around trust and loyalty. Can a non-family member be trusted to run a business that has been built up by the family and is that individual likely to remain loyal to the company for more than just a couple of years in a business world where loyalty is increasingly less frequent?

A CEO thinking about working for a family business is likely to have concerns over independence, nepotism, hidden agendas and general governance-related issues. These concerns are likely to be much less in non-family businesses.

Egon Zehnder says that non-family CEOs tend to fit into three archetypes, which could make the task of hiring one easier if the business knows what these are.

The counterpart: A CEO who is likely to be a “true successor, who actively participates in shaping corporate strategy, works as an equal partner to the leading family members, and over time, replaces them.” Counterparts will create their own momentum and drive change in a family business while also helping to maintain its values and skilfully manage it.” The personality traits of a counterpart CEO are likely to be independence, confidence and ambition.

The steward: “A manager who is never on an even playing field with the family but adds enormous value by executing their vision in an effective, professional manner.” Stewards are ideal for business owners whose primary concern is to maintain their legacy and keep the existing operations running smoothly. Their personality traits are likely to be flexible, cooperative and communicative.

The governor: “A leader who runs the business within a carefully crafted framework of governance.” Governors prioritise day-to-day management over preserving the family’s values or spearheading strategic moves. The least common of the three types, says the search firm, governors are usually found in conglomerates and companies held by dispersed families with low equity. And their personality types are pragmatic, operational and hard working.