Family Business Advisory

Family businesses are a major growth driver in most national economies and account for the vast majority of companies worldwide. With their high capacity to create employment and their long-term vision, family firms make a unique contribution to the global economy as well as to society in general.

In many respects the challenges facing family firms derive from their special dynamics. Take, for instance, succession planning: the majority of family businesses are still led by the founder (first generation) especially in the emerging markets. Transition to the second or third generations is pending and will be a major factor in shaping each company’s success. On the other hand, the growing size of the family in long-established business in the Western economies poses a different challenge. These companies require greater formality to balance the various family and business interests and ensure the tradition of continuity.

Our aim is to identify the best talent to forge a bright future for a family-owned company. Based on decades of experience in working with many of the world’s finest family companies, we know that the critical first step in this journey is to build alignment amongst family members and across generations around the family’s philosophy and approach to business and ownership. With this in mind, our consultants work closely with the family members and owners to create an environment conducive to driving the best people decisions in their specific context.

In the interest of serving family corporations more effectively, Egon Zehnder International has set up a dedicated Family Business Advisory Practice. The aim of the practice group is to focus on key issues such as founder transitions, succession planning – including selecting the best leaders amongst family and non-family managers – planning the role of the next generation, and developing the right governance framework for the business and the family.

Our advisory work is structured around three key areas:

Our consultants are partners in building value-based alignment between family, owners, and management. Their aim is to build consensus on managing the family and business dimensions of a family company to ensure its continued success. A key part of this exercise entails articulating a governance framework that separates business from ownership and provides a “process” for families and owners to resolve conflicts. This could take the form of Family Councils, Family Offices, Owners Councils, Advisory Boards, etc. We are able to bring our global knowledge and experience to advise on the appropriate governance frameworks and defining the remit of these bodies. Based on a clear assessment of the strategy and the ownership structure, our role is also to support the competency-based selection of independent directors and advisors to bring these governance mechanisms to life and periodically review their effectiveness.

Founder transition is one of the most emotional and challenging issues that faces every family business at some time. Each generational transition is an opportunity to reflect on the future strategy and the ownership and management structure. Preparing for this transition in advance is a critical to continued success of the business. This is a process that needs to be managed over time and not something that is best done as an eventuality. We assist family companies in planning this transition by obtaining an accurate picture of existing family talents and their motivations, benchmarking them against the best available internal and external resources (especially in the critical phase of founder transition), and analyzing their potential in the context of the future strategy of the business and the vision of the family. In addition to attracting the best talent in the market to family companies, we also help define roles for next-generation family members and draw up induction, coaching and development plans for promising, next-generation family leaders.

For many family firms, recruiting top executives from outside the family represents a major challenge and stumbling block. At the start of such assignments, we assure all stakeholders are aligned about the expectations and profile of the senior executive to be attracted. By drawing up value- and competency-based CxO position profiles, Egon Zehnder International helps companies identify and evaluate relevant internal and external, family and non-family candidates. Once the most suitable candidate has been recruited, we offer support to both our client and the recruited candidate throughout the integration process, as well as organizational alignment reviews of the top management team.

Egon Zehnder International is the exclusive global alliance partner of the prestigious Family Business Network International (FBN-I) for the fields of Board Consulting, Succession, Leadership and Organizational Development. FBN-I is the world’s leading family business organisation with more than 4,000 member firms across 45 countries. A not-for-profit organisation, the network is “by families, for families”.