PwC Family Business Briefing promotes the Professionalising of both Business and Family

Professionalising the family, not only the business was the key message at PwC’s recent Family Business Briefing. ‘The need to professionalise is recognised as both a business and family issue….determining what is the sustainable model that is needed to be put in place for a successful business and family’ said Paul Hennessey, leader of Irish Family Business Services at PwC.

The event was a review of the PwC 2014 Irish Family Business Survey Report findings and included a keynote address from Dr Eric Clinton, Director of DCU Centre for Family Business. Dr Clinton spoke of professionalising the family business for future generations and presented two family business frameworks, the 4Ls model and the three-circle model (family, business and ownership).

Formulating and implementing a family constitution and succession plan were leading topics at the event. The PwC survey results found that only one in ten have a succession plan that is robust and fully documented. 78% of Irish family businesses have at least one procedure in place to manage conflict, which is slightly lower than the global average of 83%.  

However, only 7% of Irish family firms have a family constitution compared to 22% of global counterparts. ‘The message here is that there’s progress, but there are areas that need focus over the next couple of years’ said Mr Hennessey. ‘The whole exercise of producing a family constitution is more important than documenting it because it is during the exercise that you will address problems’ he highlighted.

 ‘Who are your stakeholders?’ was the question posed to the room of family business practitioners by Eric Clinton. Dr Clinton said this question was fundamental to the professionalising process of the family business. He spoke of the importance of formalising the business, especially in relation to management decisions. ‘Reduce nepotism by having clear agreed policies on employment’ he said.

He also referred to the 4Ls model as a guide for ensuring the smooth integration of family business aspirants. ‘The next generation needs to challenge the status quo. What are the expectations of the next generation?’ he stated.  He also spoke of the need to embrace the ‘inevitabilities’ of family business: ‘Working with family is inevitably challenging at times’, he added, ‘inevitably there will be change for the business and for the family’.

Referring to CFB’s upcoming events for family business practitioners, Dr Clinton said ‘we’re trying to create an environment for family members to network and learn from each other.’ Among the event attendees was Noel Matthews, second generation family member of Matthews Coach Hire Ltd. Mr Matthews found the topic of professionalising the family business relevant to his family operations:

‘It’s very important to us. We are finding ourselves having to upskill and to hire external professionals in our business now. It’s gotten to that stage where we need to professionalise it.’

The family company is preparing second generation takeover with a third generation following closely behind, so succession planning is important to them according to Mr Matthews:

‘We’ve done a lot of planning with the help of the Centre for Family Business and the programme seriously helped us so we don’t think it’s going to be that big of a challenge for us because we are so proactive.’

Enda Lacey is a second generation family member of bale wrapper specialist, Tanco Autowrap. Mr Lacey was present at the event and had this to say about professionalising his family business:

‘From my family’s point of view, we recognised that we needed to have something that’s a bit more formal in place and more structured….It’s not about the cottage industry anymore, it’s about competing on a global stage and to do that you’re going to be competing against other professional organisations so it makes sense that we do have to professionalise so that’s what we’re gearing up to.’

The event drew to a close with a panel discussion chaired by Eamonn Quinn, Chairman of Kelsius, who was joined by Paul Hennessy, PwC; Eric Clinton, CFB; and Conor Whelan, Managing Director of Eason & Son Ltd.

To view event slides please click here.