Celebrating 30 Exceptional Families
Atlanta-based Herschend Enterprises is the operating business of the Herschend family. It encompasses four divisions, all focused on providing wholesome family entertainment. The divisions are parks and resorts, digital and media, adventure tours, and live/touring shows. Attractions and properties under the Herschend umbrella include the Harlem Globetrotters, Dollywood, Silver Dollar City, Chuggington and Splash & Bubbles (with the Jim Henson Company). Herschend employs more than 12,000 individuals and hosts more than 14 million visitors annually.
In addition to its operating business, the family stewards a giving business (The Neighbor Company) and an investment business (Elmwood Management). The goal is for the enterprise to remain “Family Held Forever.”
To celebrate its 30th anniversary, Family Business honored 30 outstanding family businesses:
The operating business was founded in 1950 as a cave tour in southwest Missouri and is now the largest family-owned U.S. themed attractions company. There are 52 family members in the second through fifth generations, of whom 29 are stockholders and limited partners. No one from the family works in a managerial role in the operating business. Ownership has been aggressively passed down to the rising generation repeatedly since the 1970s through trusts and a voting/non-voting share structure, with the third generation controlling the business since 1998 and much of the equity passed along to the fourth and fifth generations using trusts.
Herschend has had an independent fiduciary board since 1971, and non-family CEOs have been at the helm of the company since 1991. The board spent 20 years preparing for non-family leadership by establishing and “stress testing” systems for decision making and conflict resolution, instituting a long-term management incentive program and ensuring appropriate boundaries between owners and managers. The board consists of just two family directors and seven non-family directors. A lead family director (third-generation member Chris Herschend) partners with a lead independent director to guide the board. The company recently refreshed its board, with three new directors joining in the past year.
The operating business board has overseen a diversification strategy inside the operating company and has coordinated with the family on its external diversification efforts, which focus on diversifying without divesting. Healthy growth in the operating business fuels healthy diversification and giving.
The third generation spearheaded the development of written stockholder objectives as it came into controlling ownership in 1998, and company management set its internal measurements to match these objectives. The family’s risk tolerance has been established, communicated and adjusted to match changing needs over time. Policies governing dividends and redemptions were established to provide liquidity for family members.
Elmwood (the investment business) and Neighbor (the giving business) both have independent boards as well.
On the family side, the Herschends’ family council, which has well-developed committees, serves as the hub for communication to family members. Transparency is emphasized. The family values are well-defined. Family meetings follow a written code of conduct, which is affirmed by every individual at the start of every meeting. The meetings offer opportunities for the family to communicate directly with the board and management and to provide family education and have fun together.