Setting the standard in governance
In commemoration of Family Business Magazine’s upcoming 30th anniversary, later this year we will honor 30 family businesses that have exhibited exceptional progress in business governance, family governance, business growth and family engagement. This has given me the opportunity to reflect on how our magazine has helped shape the development of the family business field in general and its corporate governance in particular.
For three decades, Family Business has been at the forefront of thought leadership in the professionalization of family business governance and management. Recognizing the vital importance of family businesses to our economy and society and having worked together building the Hay Group, a global HR consulting firm, and then later multiple media and information businesses, in 1989 my grandfather and father started Family Business, a publication to serve the needs of family business owners and operators. The magazine and our Transitions conferences, founded in 2010, provide family business owners and operators the knowledge and tools to succeed in their roles. My mother became publisher of Family Business in 2005, and for the past decade, I have had the privilege to work by their side and see the growing importance of our suite of services to the family business community.
I have also come to recognize that rather than follow the lead of public companies, many family businesses have been at the forefront in answering a fundamental question: What is the purpose of a company? Many family businesses take a much longer-term outlook and a broader view of their purpose. This lens is fundamentally different than that of many public companies, which focus on maximizing short-term shareholder value. However, as noted in recent issues of Directors & Boards (also owned by MLR Media, Family Business Magazine’s parent), more public companies are adopting the values and perspectives long held by family businesses. Family firms’ policies and principles are increasingly being recommended as aspirational “best practices” for major public companies.
These include the following: First, an expanded notion of stakeholder interests that includes employees, customers and communities, as well as the economy and society as a whole. Second, demonstrated commitment to providing long-term value to these stakeholders, including notably the long-term welfare of the employees. Third, recognition and acceptance of Environmental, Social and Governance and sustainability responsibilities. Fourth, a culture that gives priority to ethical standards. And fifth, directors with in-depth knowledge of and extensive experience with the company’s businesses, which often encompasses former executives and family members who are not “independent” by SEC standards.
I am proud that for three decades Family Business has contributed to the advancement of corporate governance with a focus on the long term. Moreover, our magazine has continuously underscored how good governance of family businesses can lead to improved family dynamics and closer family relationships. I am fortunate to have been on this mission with my grandfather and my parents. Working together has brought us closer. I look forward to continuing to present in the pages of Family Business the lessons and best practices that enable your family business to grow and prosper.
Bill Rock is the president of MLR Media, publisher of Family Business.