HR should take a look at succession planning and gender diversity policies of family businesses if it wants to play a a bigger, more strategic part in firms.
According to a new report by EY and Kennesaw State University’s Cox Family Enterprise Center, 87% of the the world’s largest family businesses have clearly identified where the responsibility for succession planning lie.
They also take succession planning as an ongoing process and adequately train and prepare their successors for both ownership and leadership succession.
“The characteristics and practices of large, long-lived family businesses serve as a model for other family businesses as well as other companies that aspire to maintain an entrepreneurial spirit, innovate and grow consistently,” said Joe Astrachan, PhD, professor of management and entrepreneurship, Kennesaw State University.
Another aspect of people management in which family businesses are shining in is gender diversity.
These firms were reported to have an average of five women in the C-suite and state they are grooming four others for leadership positions.
Additionally, 55% of them have at least one woman on their board and 70% of them are considering a woman for their next CEO.
“Family businesses are vital to the global economy. They account for more than two-thirds of all companies globally, count many leading household names among their number and provide 50% to 80% of all employment, so a survey like this, that allows us to discover the noteworthy practices and characteristics of the largest among them, is hugely valuable. There is a clear picture emerging of what it takes to succeed in the long term: care for the family allied with first-class corporate governance and practices,” said Peter Englisch, global and EMEIA leader, EY Family Business Center of Excellence.
Communication and cohesiveness levels among leaders were also found to be commendable among family businesses.
90% of these firms reported that they have regular shareholder meetings to discuss business issues. Additionally, 81% of the business owners stated they care deeply about one another.