Best Practices for Family Owner Governance? Research Provided and Opinions Wanted!
This issue of The Practitioner features a blog, based on an article, based on an upcoming book – all on the topic of Family Owner Governance. Readers are invited to participate in the ongoing research by completing the survey at the end. This blog is based on paper forthcoming in FBR and the presentation that will be made at the FFI global conference October 16-19, 2013 in San Diego.
What are the best practices for family owner governance? Like succession, governance is a classic topic in the family enterprise field. Recent research (summarized below) provides insights into those practices from the business owner perspective, but family business advisors are in perhaps the best position to see governance practices that work. Hence this blog and a request to complete a survey!
First, let’s look at the some research results, first published in a 2012 FBR article and then more extensively discussed in a book to be published this fall titled The Landscape of Family Business, co-authored by Keith Brigham, Tom Lumpkin, Ritch Sorenson and Andy Yu. This research summarizes outcome variables used in empirical research about family business over a 12-year time span and displays relationships among those outcome measures in a Landscape Map.
The Landscape Map shows that family businesses have two major dimensions:
- a business/family dimension
- a short-term/long-term dimension
The need for governance in the owning family increases when owners move from seeking only short-term business outcomes to seeking long-term and family outcomes.
Within the two-dimensional landscape there are seven clusters of family business outcomes: 1) business performance, 2) business strategy, 3) social and economic impact, 4) succession, 5) family business roles, 6) family business dynamics, and 7) governance.
The central outcome category in the Landscape Map, however, is governance. How family business owners govern influences outcomes across the Landscape Map. The governance chapter in the upcoming book reviews research and recommends best governance practices related to family ownership, family control, governance structure, decision-making, family business mission and goals, role of the network, and human resources.
Now for the invitation: If you have consulted with 20 or more family businesses, you are invited to click on the link provided below and complete a survey. You will receive a summary of survey results. Also, the results will be part of our presentation at the FFI conference entitled, “The Landscape of Family Business: Practical applications for ground breaking family business research.”
About the Contributor
Ritch L. Sorenson, Ph.D. is Opus Endowed Chair in Family Business and Academic Director, Family Business Center at the University of St. Thomas in Minneapolis. He and his colleagues Keith Brigham, Tom Lumpkin and Andy Yu are the recipients of an Honorable Mention Award for the Best Paper Published in FBR in 2012. Ritch can be reached at [email protected]
Stay tuned next week for another issue of The Practitioner.
Yours in Practice,