Survey of Advisors to Family-Owned Firms Shows They're 'Somewhat Optimistic' on '04 Prospects for Family Businesses 10/1/2003
From: Jane Kuby, 617-512-0648, or Judy Green, 617-482-3045, both of the Family Firm Institute TORONTO, Oct. 1 -- A survey conducted by the Family Firm Institute (FFI), at their annual conference, reveals that these preeminent advisors to family owned businesses rate as "somewhat optimistic" the prospects for family held firms in 2004, given the overall, current economic environment. The next highest percentage of respondents were "very optimistic" about '04 prospects with the smallest percentage responding that they were "somewhat pessimistic" about prospects for the next year. At the same time the professionals who advise family firms-which account for two-thirds of business worldwide-rank as the top three challenges facing family businesses: Succession, Management team effectiveness and the Current economic environment. The research, which inaugurates the Family Firm Institute Annual Conference Survey, was conducted among more than 400 attendees of the FFI annual meeting, held in Toronto Oct. 1 through 3. Respondents represents leaders in the professions that provide key advice to family owned businesses including management science, behavioral science, education, law and research. More than 75 percent of the survey respondents stated that "Enron and other corporate scandals" had not changed their advisory recommendations to family firm clients. Of those who responded that misdeeds by Enron and other corporations had affected their professional recommendations, they listed the following as specific advisory changes: -- Increase corporate governance -- Institute greater transparency in fiscal oversight -- Add outside directors and reconsider compensation and audit committees -- Give greater priority to security, as it relates to operations, succession planning, disaster recovery and cross border transportation Other survey results show that: -- Overwhelmingly respondents view family-businesses, rather than, institution-businesses, as being better positioned to weather an unsettled business climate -- Advisors have not detected a difference in family firm philanthropy due to "9/11" or the looming Baby Boom retirement -- More FFI survey respondents view as "neutral" the move by family business owners to "convergence," i.e., one-stop shopping for multiple professional services. A slightly smaller percentage viewed convergence as positive, with the smallest group of respondents regarding convergence as negative -- In addition to citing succession as the number one challenge to family firms, the largest percentage of survey respondents also indicated that 10 is the optimum number of years prior to founder's retirement that a succession plan should be created. The next largest group of respondents found that a succession plan should be in place 15 years prior to the founder's retirement ------ The Family Firm Institute (FFI) is an international professional membership organization dedicated to providing interdisciplinary education and networking opportunities for family business advisors and consultants, as well as, educators and researchers. FFI is also dedicated to raising pubic awareness about trends and developments in the family business field. Nearly 1200 individuals and organizations from various countries in the Americas, Europe, Asia and the Pacific are currently members. |