In football, the equity of some of the most successful clubs, as with the longevity of their prestige, was never built on trophies or on the elevated status of some of their players or coaches. These clubs became veritable institutions because no matter how important or valuable their players were, no one ever became bigger than the club.
Probably, this same concept may apply to running a family business – often a delicate, complicated and challenging affair due to clashes of personalities and opinions. In fact, I believe that many family businesses can easily avoid most challenges when the family members start looking at their company not just as a business but as a brand.
Family businesses already enjoy an advantage because the core of their brand is already rooted in what intrinsically makes a brand succeed and achieve longevity: the authenticity of a unique family history built on tradition and committed to building its community.
Indeed, even history shows us how the most successful family business brands are the ones where no family member ever became bigger than the brand.
These thoughts crossed my mind when I recently attended a very insightful business breakfast organised by Ganado Advocates and Zampa Debattista which addressed the role of, and the challenges faced by family businesses in Malta’s corporate ecosystem.
“Family business members need to work not only in the business but also on the business,” remarked Marthese Portelli from the Malta Chamber during the first part of the event where she also outlined some alarming figures from the Chamber’s 2022 survey.
“Our survey found that over 70% of SMEs are family businesses but out of these, only 33% feel the need for a succession plan, 62% of family businesses have no strategic plan and 65% have no succession plan.”
“Whilst there have been positive changes on how boards of directors are appointed, another particularly positive thing is the willingness being shown by most businesses to improve their governance aspect,” she added, and urged family businesses to revisit their processes, to recruit more non-family members in their management, to ensure a properly functioning board, to invest more in HR and to ensure proper auditing processes to increase efficacy.
Ms Portelli closed her intervention with a very important remark. Whilst describing funding in Malta as still “somewhat of a nightmare” she suggested that large family businesses who lead by example and operate above board, should be incentivised further through local funding.
The next topic was ESG, and we were told that whilst there seems to be a growing understanding of the longterm benefits that this will bring, businesses still need to be encouraged to treat this not just as another box waiting to be ticked, especially when it comes to governance.
Which set me thinking. If so many businesses are still struggling to appreciate the importance of governance, to the extent that they need to be reminded to not treat this as a mere ‘tick the box’ exercise, does this mean that we have not yet learned our lesson from Malta’s blacklisting?
Another interesting conversation, this time with Malta Stock Exchange Chairman Joseph Portelli followed, where he spoke about the benefits that businesses, including those who are family-owned, enjoy when they choose to go for listing.
“Shareholders should be interested in seeing the companies they invest in, listed because listed companies mean that they are properly regulated.”
Mr Portelli also spoke about his work at the Malta Stock Exchange since he took charge in 2014 as well as about his plans for this institution’s future, including to start attracting shipping industry listings to the Exchange, plans for a digital exchange, as well as to grow international listings.
Possibly, the active participation and input from two prominent and very respected businesswomen from two Maltese family businesses, Liz Barbaro Sant from Alberta Group and Denise Xuereb from AX Group, certainly made the morning’s topics more relatable.
They both spoke about their daily qualms and challenges, their personal struggles as they grew up in their respective businesses, the regular difficulties they face when confronted with internal family disputes and the challenging aspect of keeping family emotions and business as far as possible.
The main takeaway of this last session was that given that running a family business tends to become a very emotional affair rather than a plain sailing corporate exercise, it is of paramount importance for family businesses that they ensure proper corporate governance procedures, that they have proper succession plans set, and that they draft a family charter to guide them better when things get a bit rickety.
My personal takeaway, on the other hand, was that the way this business breakfast was organised by Zampa Debattista and Ganado Associates clearly shows that there is a young generation of professionals out there who are showing a decisive and passionate will to keep many of Malta’s corporate market players succeeding.
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