Family Business Magazine E-Newsletter
June 5, 2007



Contents
1.  Survey: Many family business leaders lack plans, policies.
2.  Bancrofts consider offers for Dow Jones.
3.  Brig. Gen. Henry Robert's descendants control 'Rules of Order.'
4.  S. Korean conglomerate leader charged with assault, may lose post.
5.  The right way to advise your successors.
6.  Preview of Family Business Magazine's Summer 2007 issue.





1.  Survey: Many family business leaders lack plans, policies.  A recently released survey of nearly 800 leaders of U.S. family businesses revealed signs of potential trouble ahead. The respondents -- whose companies generate more than $5 million in annual revenues -- overwhelmingly (about 95%) reported that they manage their company as they would any other business. More than 96% of them anticipated that their business would expand, or at least remain the same size, over the next year. Despite this optimism, only 56% said they have a written strategic plan. Less than 30% reported having a written succession plan, and less than 40% said they have a successor lined up. Nearly 64% said they don't have a family employment policy stating required qualifications or experience. The survey was conducted in the first quarter of 2007 by Laird Norton Tyee, a Seattle wealth management firm, in partnership with the Austin Family Business Program at Oregon State University and the Albers School of Business and Economics at Seattle University. Laird Norton Tyee's majority shareholder is Laird Norton Co., a seventh-generation family firm. "We hope that the results of this survey inspire family businesses to focus attention on planning, governance and management structure, and other key elements that will drive success, both now and in the future," the survey report says.  (Source: www.familybusinesssurvey.com.)

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2.  Bancrofts consider offers for Dow Jones.  Members of the Bancroft family, which controls 64% of the voting power at Dow Jones & Co., met on June 4 with Rupert Murdoch, whose News Corp. has made a $5 billion bid for the company. The family also said it would consider other offers. Three Bancroft family members attended the meeting, along with Dow Jones Chairman M. Peter McPherson and two advisers. Murdoch was accompanied by his son James, CEO of News Corp. affiliate company British Sky Broadcasting, plus News Corp.'s CFO and general counsel, the Wall Street Journal reported. According to the New York Times, Murdoch "made clear that he would not accept the terms of the Bancroft family's proposal, which would give a board of independent overseers the power to hire and fire top editors.... [H]e offered a less independent sort of governing board." The Times report also said the parties did not discuss price, although the Bancrofts are said to want Murdoch to increase his offer. An earlier Journal article said that "Some family members have become convinced that 'the status quo' is no longer an option for Dow Jones ... A particular concern is the planned $17.2 billion merger of Reuters Group PLC and Thomson Corp.," which would increase the competition faced by Dow Jones Newswires. A report in the New York Times added that another factor was "a speech by the chief marketing officer for Macy's stores" that "questioned the relevance of newspapers." According to the Times, Murdoch's third letter to the Bancrofts promising that an independent board would oversee editorial integrity at the Journal "weighed heavily on the family," as did a presentation by Dow Jones chief executive Richard F. Zannino that suggested "the company was unlikely to achieve results that would match Mr. Murdoch's offer." But, according to the Journal, some Bancroft family members didn't realize their May 31 statement effectively said they were willing to consider a sale. "As they were discussing the meaning of the statement at the board meeting," the article said, "there was some debate about having it rephrased or even withdrawn, but just then, the Wall Street Journal posted a draft of the statement online. That ended the discussion." A Page One story in the Journal June 2 noted, "In the month since Mr. Murdoch's offer became public, the [Bancroft] family has experienced conflict and turmoil." The family took time to change its mind about meeting Murdoch partly because it "lacks a leader," the article said. One branch of the family, the Hills, "had concluded that the family's passive stewardship was hurting the company's competitiveness," the report noted. Meanwhile, a New York Times article said, "Many in the Journal newsroom have not hidden their discomfort with Mr. Murdoch's bid. Dozens of reporters and editors wrote to members of the Bancroft family asking them to reject the News Corporation offer." The union representing Dow Jones journalists has hired advisers to explore alternatives to the News Corp. bid. (Sources: Wall Street Journal, June 4, 2007, June 2, 2007, June 1, 2007; New York Times, June 2, 2007, June 1, 2007, June 5, 2007.)

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3.  Brig. Gen. Henry Robert's descendants control 'Rules of Order.'  Robert's Rules of Order, the venerable "go-to guide for conducting parliamentary-style meetings," is still controlled by descendants of Brig. Gen. Henry Robert, an Army engineering officer who wrote the first edition in 1876, according to a report in the New York Times Book Review. "The book came about when Robert, stationed with the post-Civil War Army in San Francisco, was asked to lead a church meeting and realized he didn't know how," the article said. "Today, Robert's descendants remain devoted stewards of their property, which brings in between $80,000 and $100,000 a year in royalties, according to the head of the 16-member family association." Henry Robert III, a grandson of General Robert, serves on the authorship committee, the report noted.  (Source: New York Times Book Review, May 20, 2007.)

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4.  S. Korean conglomerate leader charged with assault, may lose post.  Kim Seung-youn, chairman of South Korea's Hanwha Group -- a conglomerate of insurance, chemical and other companies started by his father -- has been arrested and faces up to 22 years in prison on six charges of assault, abduction and confinement after an incident in which he and 12 others allegedly beat up men who had fought with his son the night before in a karaoke bar, the Wall Street Journal reported. He may be forced to relinquish his position at Hanwha, which generated $23.7 billion in sales in 2006, the article said. "For years, Korean politicians preached that business leaders needed to be treated differently because they were doing the all-important work of building the company's economy," the report noted. Today, however, "Most Koreans are less impressed and intimidated by the conglomerate chiefs than they used to be." A Seoul office worker told the Journal, "The perception of the younger generations of the conglomerate families is they are rude and mean. People here are much more critical of the conglomerate families when they do something wrong." Kim has starred in a Web ad campaign for his conglomerate; currently, he is managing the business from jail, according to the report.  (Source: Wall Street Journal, May 18, 2007.)

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5.  The right way to advise your successors.  "Many business owners who have turned over management duties to younger family members expect to play a role as valued senior advisers," writes family business consultant James E. Barrett in The Family Business Policies & Procedures Handbook. However, Barrett observes, "A large number among this group find themselves waiting in vain for requests for help." Although the seniors may have genuinely helpful advice to give their successors, Barrett observes, the next generation often fears their elders will lecture or nag them. He offers several suggestions for making the transition from business leader to adviser. Here are a few of them:


For tips and strategies for family business stakeholders at all stages of life, see The Family Business Policies & Procedures Handbook. Learn more about the book and see the table of contents here.

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6.  Preview of Family Business Magazine's Summer 2007 issue.  The Summer issue of Family Business will be mailed to print edition subscribers this month. The issue focuses on family companies' special status in their communities. It features a profile of Meijer Inc., the Michigan grocery and merchandise chain that is committed to its regional customers. Also included is a two-part report on business families and the media, a discussion on political activism in a family business setting, and some advice from a business leader on starting a blog. Visit our website for subscription information.

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Family Business Magazine's new Classified advertising section debuts Autumn 2007.  Buy, Sell & Trade with other family-owned businesses in the following categories: Business for sale, Wanted to buy, Supplies, Equipment for sale, Buildings/land for sale, Barter/trade, Misc. $150 per inch per category (approx. 50 words). First 10 one-inch ads received will run free of charge! Call Barbara Wenger at (215) 405-6072 or e-mail bwenger@familybusinessmagazine.com.

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