Here’s an interesting finding from a piece of research. According to the employees of the top 500 biggest family businesses in the world, most see the family’s ownership of these companies as philanthropic, rather than economic.
The insight was part of a study by the professional services group EY, which analyzed the 500 businesses from the University of St Gallen’s Global Family Business Index, in detail. The EY research found that 55% of the sample group of employees from these companies said they recognize the family owner most through their philanthropic efforts, rather than economic. That was followed by their recognition through shareholders (53%) and then through their links to the board of directors (44%).
The insight is interesting because it potentially shows that the philanthropic efforts of business owners might have a previously unknown, or at least less appreciated, benefit – better employee/owner relationships. Probably more research needs to be done before any conclusions can be made, but it’s thought provoking, particularly if you’re an owner of one of these big family businesses, or even a smaller one.
Other interesting bits from the EY analysis of the 500 businesses included family involvement in their companies. EY found that nearly three quarters (73%) of the families owning these businesses had a member of the family on the executive management board. Again, this is an interesting figure and suggests family involvement on the operational side is still very high. Unsurprisingly, family involvement was higher among privately-owned family businesses than listed ones.
The research also found that family involvement in the executive management was greater among family businesses that were between 50 and 100 years old, compared with businesses in their first 50 years of existence. Again, this seems a bit counter intuitive, given that first generation founders are usually more connected to the business then subsequent generations. But then family businesses can often be counter intuitive in many ways.