W.S. Darley & Co.

The company, founded in 1908, manufactures fire engines, pumps and related equipment for first responders and distributes tactical equipment to the Department of Defense. W.S. Darley is headquartered in Itasca, Ill., with manufacturing, engineering and R&D operations in Chippewa Falls, Wis., Janesville, Iowa and Grand Rapids, Mich.

The company is co-owned by three branches of the Darley family. Paul Darley serves as president, CEO and chairman. There are 13 family owners in the third generation, seven of whom work at W.S. Darley, plus seven of the 32 fourth-generation members. The family employment policy requires them to work elsewhere before joining the family business.

Paul’s father, Bill Darley, joined the family business in 1950. He became president in 1962 and held that title until 1997. He retired as CEO in January 2010 and stayed on as chairman until 2015.

Bill, who passed away in 2018, had sole authority when he ran the business under a voting trust. In the second generation, there were only four family shareholders and no pressing need to grow the company, which generated enough profit to support the four owners. Bill realized that situation would change when the business transitioned to a cousin consortium in the third generation.

In honor of its 30th anniversary, Family Business honored 30 outstanding family businesses:

A. Duda & Sons Inc.

The Agnew Family Enterprise

The Biltmore Company

Bush Brothers & Company

The Clemens Family Corporation

Crescent Electric Supply Co. 

Day & Zimmermann

Dot Foods Inc.

The Duchossois Group

E. Ritter & Company

Elkay Manufacturing Company 

Flanagan Foodservice Inc.

Herschend Enterprises

Hussey Seating Company

IDEAL Industries Inc.

Kiolbassa Provision Company

Laird Norton Company

Lloyd Companies

Lundberg Family Farms

Lyles Family Enterprise

MacLean-Fogg Company

Mannington Mills Inc.

Menasha Corporation

Midmark Corporation

Port Blakely

Sheetz Inc.

Vermeer Corporation

Vertex Inc.

Wittwer Hospitality/Boulevard Home

 

Around 1980, Bill established a division structure in the company. That enabled family members coming into the business to have an area of their own to grow. The third generation grew and diversified the company. Division leaders make decisions independently, with major decisions made by consensus.

After Bill had emergency heart bypass surgery in 1989, he prioritized succession planning. In 1994, he formed an executive team consisting of three third-generation members and requested reports from each of them on how they would run the business. In 1997, after realizing he could not choose a successor, he left it up to the executive team to make the choice.

The team considered several options, including a co-presidency, rotating the president’s job among the three of them and choosing a president from outside the family. In the end they decided one president would be the best option for the company and selected Paul, the youngest of Bill’s five sons. The family empowered Paul and put their trust in him based largely on his communication, organizational and leadership skills.

The Darley family has had a family council since 1991. A family constitution, developed by the council early on, emphasizes that family members are a team, regardless of their individual positions in the company. The constitution outlines how the company would handle a serious family disagreement. The family revisits the constitution in annual meetings and makes revisions when warranted. Core values have been documented.

A family participation plan outlines the qualifications required to work in the family company and requires that family members be paid at market rate for their positions.

The family council emphasizes transparency and works on team-building among different generations and family branches.

Shareholders receive communications via email, webcasts and other means on matters such as dividends, strategic planning, new hires and forecasts. Family members have a chance to voice their opinions behind closed doors but present a united front to the board of directors.

The company began to professionalize its board in the early 2000s and has seen sales and profits increase ever since. The company bylaws require the board to include more family than non-family directors. Today the nine-member board has four family directors who work in the business (including Paul) plus one family director who represents shareholders who are inactive in the business and four independent directors.

The board has become increasingly involved in succession planning and in the hiring and onboarding of family members. The fourth-generation members working in the business present a report to the board at each board meeting.

W.S. Darley also has a seven-member defense advisory board, which meets once a year for two full days. The company views the defense advisory board as a training ground for potential independent directors.

Article categories: 
Issue: 
September/October 2019

Other Related Articles

  • Family Business CEOs to Watch 2020

    This year, business leaders in all sectors were tested as the COVID-19 pandemic challenged them to keep revenues coming in and circumvent supply chain disruption while taking measures to ensure the sa...

  • Ben's Chili Bowl: A spicy landmark in the nation's capital

    Tucked away on a once-trendy, once-forsaken, now-trendy-again street in Washington, D.C., stand two national monuments perhaps less publicized but certainly as beloved as the museums and memorials tha...

  • Bringing joy, and fresh food, to low-income communities

    Even if you don’t live in Greater Philadelphia, you may be familiar with Jeffrey Brown, a fourth-generation grocer who is chairman and CEO of Brown’s Super Stores. About half of the 12 ShopRite an...

  • Leaning in to uncomfortable conversations

    Family businesses in the United States have been hit hard this year from a variety of angles. Stress on operational business activities due to the global pandemic and ensuing recession have necessitat...