In this issue
In the early years of a business, when the founding generation needs or wants extra cash, they make a distribution from the business to their personal account (if the company is turning a profit). Over the years, they gift or sell ownership to the second and perhaps third generations, and distributions become more complex.
The five children of J.S. and Miriam Herr grew up within 100 feet of the plant in Nottingham, Pa., where Herr’s potato chips were made.
“Sometimes we would get chips as they were coming out of the fryer,” recalls J.M. Herr, 70, past chairman of Herr Foods Inc., the family business that made those potato chips. “It was way before any real concern about safety, so we would run into the plant to see Dad or Mom working.”
Around the dinner table, there was often talk about the business, and occasionally a worker from the plant would stop by the house with a question.
Imagine this scenario: You are a successful business owner with two young children. Your business is increasingly profitable; the value is growing rapidly. You decide to set assets aside in trust both for estate planning purposes and to provide your children and future grandchildren with rainy-day funds. You plan to ask your brother to be the trustee of a trust for your family, but you wonder how his career in medieval French literature will be applicable to his role as trustee.
Generation of family ownership: Fourth.
About the company: Highlights for Children reaches over 3 million families a year in the U.S., and Highlights products are available in 20 countries.
Number of employees: Slightly more than 400.
The onset of COVID-19, the movement for racial justice and warp-speed changes in biotechnology – these are a few of today’s realities transforming family aspirations to prepare the next generation of inheritors to anxieties about how to do just that.
Family Business takes a look at what innovation looks like in a family business environment. We sat down with Edouard Thijssen to ask about his experience as an innovator.
INNOVATOR: EDOUARD THIJSSEN
COMPANY: TRUSTED FAMILY
ROLE: FOUNDER & CEO
LOCATION: BRUSSELS, LONDON, NEW YORK
LOCATION DURING PANDEMIC: LONDON, BELGIUM
I’m a NextGen member of a multigenerational Belgian family business. Our family business is in the building material industry.
THE NERDY STUFF
As we continue to live with COVID and the social distancing and precautions that are required, many family office professionals and advisors are wondering if we will ever return fully to in-person family meetings.
Why do people get anxious, worried, bothered when talking about succession planning?
Think about it. Everything is at stake. When that happens, anxiety is a healthy response. It’s also a great motivator to start planning.
What is the biggest misconception about succession planning?
Succession is not a moment in time in which one leader passes the reins to another. We know for sure that the next stage won’t look like the last one.