The UHNW Institute’s September Theme: Family-Owned Enterprises

As we get back to business after an eventful and relaxing summer, The UHNW Institute will focus on this September’s theme: Family-Owned Enterprises. Much of the content and programming we will highlight this month will focus on this theme, including our upcoming Family Enterprise Risk Roundtable on September 21 from 5-6:30 pm ET with Linda Bourn and Natasha Pearl. In the meantime, we encourage you to explore The UHNW Institute Resource Library for related topics on family businesses, including the selection of books, articles and podcasts we’ve highlighted below.

This month’s curated content begins with the paper that prompted our September roundtable, The Family Enterprise Risk Index, one of the largest risk studies completed to date. This index analyzes risk and risk management practices within the family, family enterprise and family office setting to understand what keeps us up at night given the evolving complexities that family enterprises face today.

Family-owned enterprises can be the glue that binds generations together or they can be the defective wheel that derails them. To gauge and support your needs and foster engagement within our Community Forum, we will be highlighting Institute members throughout the month with Q&As on Family Enterprise where you can share your insights, ask questions and offer suggestions to colleagues. We invite you to join the conversation in our Community Forum thread: Family-Owned Enterprises within The UHNW Institute member portal.

Enjoy these resources, all of which are housed within The UHNW Resource Library:

1. WHITE PAPER– Alliant Private Client – Family Enterprise Risk Index

This comprehensive research white paper surveyed 145 family enterprises, looking at multiple areas of risk and risk management practices. It surveyed both family members in the enterprise and those who work in the family office (family and nonfamily), comparing responses between family and nonfamily members to reveal some important differences. The research provides helpful insights into areas where family offices and enterprises need to focus efforts related to talent, succession, family conflict, cybersecurity, and investment performance.

2. REPORT – KPMG – TheRegenerative Power of Family Businesses

In this ongoing series of research studies by STEP and KPMG, the authors review the factors that facilitate the generational transition of entrepreneurial spirit and skills. They also provide data on the changing demographics of modern business families such as the increasing role of female leaders.

3. ARTICLE – Rebecca Meyer and Fredda Herz Brown – Trust & Estates Magazine – Building Resilience in a Family Enterprise

Helpful to advisors and families, this article emphasizes the importance of developing resilience in individuals and the family system. Using case examples, the authors stress how building the muscles of resilience can support a family’s capacity to manage internal lifecycle complexities as well as external, unexpected challenges that arise. The authors introduce a strategic planning process focused on three steps that support the practice of resilience.

4. BOOK – Josh Baron and Rob Lachenauer – Harvard Business Review – Family Business Handbook: How to Build and Sustain a Successful, Enduring Enterprise

This family business handbook is a great summary and textbook by two prominent consultants at Banyan Global Advisors. It covers the basics needed to understand family enterprises while providing useful detail in selected areas of governance, boards, and family dynamics. It is also frequently recommended by advisors to family members who are beginning their education about ownership and governance in family businesses. The handbook contains useful exercises for families to work on.

5. BOOK – Dennis T. Jaffe – Borrowed From Your Grandchildren: The Evolution of 100-Year Family Enterprises

Borrowed from Your Grandchildren is a comprehensive overview of the Hundred Year Families research project conducted by Wise Counsel Research under the leadership of Dennis Jaffe. It provides an excellent summary of what successful multigenerational families do around the world to preserve and grow both the family and the enterprise. It also serves as an excellent modern desk reference to important terms and concepts in family enterprise governance.

6. PODCAST TRIO- Tom McCullough – Wealth of Wisdom

Episode 7 – Alex Scott – Can a Family Stay Together After the Operating Business Is Sold?

In this episode, Tom talks to contributing author Alex Scott, a business leader and a member of a multi-generational family of wealth from the UK. Alex answers the question ‘Can a Family Stay Together After the Operating Business Is Sold?’ The answer is an enthusiastic yes!  But of course, that result does not come about without considerable intentionality and effort, so Alex describes some of the practices that worked well for his family and how other families might apply them. Note that this episode has a lot of relevance for families that don’t have operating businesses as well as those that do.

Episode 75 – Keith Whitaker and Kathryn McCarthy – Using RACI to Determine Roles and Responsibilities in a Complex Multigenerational Family Enterprise 

Making shared decisions is one of the most challenging aspects of managing financial wealth together as a family. The family enterprise structure and system, which often includes the family office, family foundation, operating businesses, trusts, trust protectors, family council, close advisors, and other operating partners, can be fertile ground for confusion and duplication if not managed efficiently and with transparency. In this episode of the Wealth of Wisdom podcast series, co-editor Keith Whitaker interviews Kathryn McCarthy on the “RACI” (pronounced RAY-SEE) governance framework. RACI distinguishes among people who are Responsible, those who are Accountable, those who should be Consulted, and those who need to be Informed. They discuss how a family enterprise can keep track of these different categories for different stakeholders and make better decisions.

Episode 22 – Josh Baron and Rob Lachenauer – What Are the Signs You’re Losing Control of Your Family Business?

This podcast demolishes the myths that family businesses are beset by conflict and poised to fail. Instead, Josh Baron and Rob Lachenauer outline ways that family business owners can learn to practice “active ownership” and materialize the true value they bring to the business. In this interview with Keith Whitaker, they also discuss the signs that you’re losing control of your family business and what to do about it.

All monthly themes may be found in the 2023 Programming Calendar here. 

If you have any questions about this month’s theme or are interested in joining The UHNW Institute, please do not hesitate to contact us.