Business

Charles Koch on the perils of family wealth destruction

Charles Koch might be one of the more controversial business individuals in America, but there’s no doubting his extraordinary business acumen and commitment to the long-term principles of family businesses. In a recent interview with the Financial Times that commitment was stated emphatically.

Here’s one of the more interesting things he said – and it has a lot to do with the dangers of wealth destruction for businesses. “When my father died we could have liquidated and…no one would have a fraction of a thousandth of what they have today.”

Koch reckons that the more shareholders you have the more difficult it is to create wealth. “As interest in a business is passed down, and more and more people have ownership who aren’t directly committed to building the business but more interested in taking money out of it, then you get in this syndrome of killing the goose that laid the golden egg.”

There’s no doubt that the business he and his brother David own — Koch Industries — has created considerable wealth. It’s the second biggest private company in the US, with revenues of $115 billion, according to Forbes, which employs more than 100,000 people worldwide.

That’s some golden egg…

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