They, of course, aren’t anything new in the world of business, but the words “long term” and “family” are set to become even bigger in 2016 as they finish the year with a flurry.
Family businesses with their emphasis on stewardship have always had a bit of a monopoly on long termism, with some justification. Most of them use the phrase with conviction. But now publicly listed, non-family business are getting into the act.
Legal & General, the UK’s biggest pension fund manager, made a big announcement at the end of 2015. Its chief executive Nigel Wilson said: “Legal & General believes in long termism”, and backed it up with the ending of quarterly reporting for the pension group. The pension group is a FTSE100 company, with a market capitalisation approaching £16 billion.
Wilson added: “The future success of the UK economy is dependent on companies and shareholders making the correct long-term business decisions. Legal & General believes making this change will help management and the board make the right long-term decisions in the interests of all our stakeholders.”
The CEO of one of the UK’s biggest companies is even using the word “stakeholders” – so familiar to family businesses – to reinforce Legal & General’s long termism. Clearly, at Legal & General it is no longer just about shareholder value.
And it’s not just words like long term and stakeholder entering the vernacular of the broader business community, but family as well. Earlier this week, the man behind the Virgin group of companies Richard Branson and arguably the UK’s best known businessman talked up the word in a big way on his company’s website. In a piece entitled “Turning a family business into a business family”, Branson pushed the family enterprise theme.
“There can be countless benefits of working with family,” said the Branson article. “The family is a natural team, bolstered by trust and loyalty, which can help decisions get made more quickly, and ideas, products and services get delivered faster.”
He even went a step further and equated entrepreneurship with family businesses. He said: “many entrepreneurs now recognise that the best way to disrupt markets is to draw on values from the family business model.”
These are important trends and shows that the broader business community is increasingly thinking about themes that have been established cornerstones of the family business community for years. It is a trend to be welcomed.