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Many of the most respected, best performing companies in the world are family-owned. With their long-term vision and capacity to create employment, family businesses are a major growth driver in most national economies and make unique contributions to society in general.
The Corinthia, Sterling, Gasan and Farsons groups are just some of Malta’s most enduring brands and favourite products that have been created by family firms. With almost 4,000 family businesses registered in Malta, this cluster of enterprises are truly the backbone of our industry.
What makes this type of business central to the Maltese economy is the sheer diversity of their structures. Despite the common perception that family businesses tend to be small in size, this may not be the case. A brief analysis shows that they come in various sizes, which exposes them to a whole myriad of difficulties and challenges. It is thus safe to say that defining a family firm or a business can be a treacherous exercise. Co-preneurs (couples who have gone into business together), step-families, siblings, cousins and other family groups can form family businesses. The family may own and manage the firm, or have a stake in the family business, but no longer actively lead the organisation.
A quick study of the local economy will also indicate that a few family businesses account for a considerable share of the total turnover of all businesses and thus make a significant contribution to job retention. This is especially important in times of crisis, as well as for ongoing creation and growth, fueling the economic engines of the Maltese islands.
Family businesses also serve as the brains behind innovation, the heart behind local philanthropy, and the nerve system of our entire free enterprise system. This is often thanks to the core values endorsed by such business, whose set of timeless guiding principles, have an intrinsic value and importance to those inside the organisation, its customers and society at large.
Family enterprises facing indecision or internal conflict rely on the broad and globally tested expertise of Grant Thornton to create and implement solutions that address their unique challenges and opportunities.
Grant Thornton’s family business advisory team assists families, owners, and managers in navigating the challenges of leadership, succession, and governance across generations. As a $5 billion global organisation with member firms in more than 135 countries, and with decades of experience serving some of the world’s finest family companies.
We know that the critical first step in this journey is to build alignment among family members around the family’s philosophy and approach to business and ownership. With this in mind, we work closely with family members and owners to create an environment conducive to driving the best people decisions in their specific context.
Grant Thornton’s tailored services for family businesses
Despite their inherent strengths and global economic significance, family-owned companies face unique vulnerabilities. Potential sources of discord among family members loom around every corner: generational transitions, major investment decisions, appropriation of profits and leadership appointments. After all, why should entrepreneurial families be less quarrelsome than any other group of relatives? The consequences of their disputes, however, can be more serious and far-reaching. Conflict is, perhaps, the greatest destroyer of value in family firms.
For family-owned companies to sustain dynamic progress across generations, they need to manage the inherent conflict between family and business on a consistent basis. Finding an equilibrium that leverages the best aspects of both family and business is difficult, but if done well, it offers handsome rewards. This is the art of family business management.
Our solutions for family enterprises centre on alignment of all aspects of the family and business, including culture, vision, mission, values, governance, ownership, leadership, communication and policy development. This alignment eliminates conflict that undermines success and clears the way for stronger competitive advantage, enhanced family harmony, and greater likelihood of long-term enterprise continuity.
We take a holistic approach to a wide variety of activities including proactive family education, family councils, board development, family meeting facilitation, conflict management and resolution, financial and business strategy, succession planning, management and leadership development and more.
Our areas of expertise when dealing with family business include:
- Assessing the ‘readiness’ of family businesses for the transition/succession process;
- Helping families prepare for and navigate through the transition/succession process;
- Providing options for both management and ownership succession within family businesses;
- Facilitating family meetings for the active family members and family councils for the broader family;
- Developing family business ‘Codes of Conduct’ or ‘Family Rules’ to help prevent potential conflict among family members;
- Assisting in the development of effective shareholder agreements that meet the needs of both the family business and the family (including decision making processes, exit strategies, distribution policies, and executive compensation);
- Coaching individual family members as the family business evolves;
- Development and implementation of family wealth planning programs.