Nominations Committees A User Guide

Family owned companies are the backbone of major economies around the world.

It is estimated that Family Businesses account for 70 to 90 percent of the world’s economy. Compared to other forms of organization, Family Businesses have considerably higher complexity within their internal structures, including relationships between individual family members, differences in their mentalities and generations, or among individual owners who are also often influenced by historical disagreements within the family, or by disturbing personal relations among its members. It is this complexity of relationships that contributes significantly to more complicated communication and to bigger difficulties in reaching out consensus on key issues related in particular to strategic direction, major investments, proportional profit distribution, business succession, and changes in leadership and strategic positions.

At Amrop, we are fully aware of the importance and distinctive specifics of the ecosystem of family and their Family Company and we have been devoted to this area for many years. We transform our thirty years of experience in strategic consulting and Executive Search, with an emphasis to this ecosystem as a unique structure with specific rules of operation and with focus on family and its members related to Family Business. We build strong partnerships based on mutual trust with representatives of Family Companies and, as independent consultants, we assist family members and shareholders in making good decisions not only on leadership, succession, organization, corporate governance, but also in other important areas.

Organizations, Governance and Management
Many Private and Family Companies have grown out of small so-called garage companies into successful Medium to Large Enterprises and their owners have hit the milestone of a challenge in managing such a large organization and needing to create their own internal, well-defined and transparent organizational structures. This process often involves creation of new positions and their sensitive integration into existing networks in the organization, placement of right candidates into the created positions, eventually replacement of people in key positions and creation of a solid structure that corresponds with internal values and particular corporate culture.

Succession and Generation Exchange
One of the most difficult challenges that sooner or later every Family Business will face is the generational change. Many company owners do not realize how difficult is the process of transitioning the company from owner to successor or successors, not only in terms of complexity, but also in terms of duration. This is also the reason why only about 30% of Family Companies succeed in transition to the second generation and only 12% of companies move to the third generation. The process of generational change and succession planning is a very emotional thing from the perspective of the founder and owner and usually lasts for several years, therefore it should be planned well in advance. Every generational change usually goes hand in hand with a change in ownership and organizational structure and adjustment of the overall strategy. We are an experienced partner in this process, especially in assessing and analyzing talents within the family, their experience, readiness, motivation and potential benchmarking them to other talents within and/or outside of the company and in assisting the selected members of the next generation to further develop and prepare for takeover of the most important positions in Family Business. We then guide them during the first few months and help them to integrate as quickly and as successfully as possible into the new leadership roles.

Succession Outside of the Family Members
The more difficult process from the perspective of the Family Company founder, but also from the perspective of family members and company owners, is the selection of suitable candidates for the succession in positions such as CEO, C-level roles, or Members of the Boards or external supervisors from candidates who aren’t family members. We have experienced professionals who put the main focus on the priorities and requirements of the founder and all key family members within the company to identify the best candidates, whose functional predispositions for the roles are balanced with a clear understanding of family culture and its values. Throughout the process, we remain a close and independent partner for the owner and family members to inform them in detail and objectively about the steps taken and about selected candidates in the process.

Learning and Development
Our partnership with family members does not end up in selecting suitable candidates for leadership positions and creating organizational structures in Family Companies. Even after these challenging processes, we continue to support successors and the new generation in integration into top management positions and in their further personal and professional development to ensure continuity of the Family Business and its successful progress.

Strategic Direction
All changes within the organization, corporate governance and management, as well as succession and generational change processes in Family Companies, are an excellent opportunity to review the overall strategy of the company and adapt it to internal changes and new market requirements. We stay close to the owners and shareholders of Family Businesses to support the review and development of a new strategic direction of the company.

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