Keeping it in the family

13 March 2012
“From clogs to clogs in three generations” runs the wise old saying about family businesses. I don’t think anyone is suggesting that the Murdoch dynasty is about to find itself out on 
its uppers – or clogs. But the recent dramas at 
News International are a reminder that family businesses, as Nigel Nicholson of London Business School has pointed out, can experience wildly varying outcomes. When things go well, family businesses have some
great advantages. But when things go wrong, 
the fall-out can be absolutely spectacular. What are the strengths of family firms? First – well, familiarity (no pun intended). You don’t need 
to spend much money on team-building exercises when many of the senior management team know each other intimately. They have grown up discussing the business. At breakfast, lunch and dinner, at the weekends, on holiday – the business 
is still the foundation for everything family 
members are doing. The staff of a family business pick that influence up too. The ‘common purpose’ of the organisation, its 
ethos, values and traditions, do not have to be spelled out. They just are. This can give a happy family business enormous cohesion and a big advantage over competitors. But if things go wrong… look out. Long-standing tensions and jealousies can burst out. Resentments can be ferocious. It may all end in tears. The last thing octogenarian Rupert Murdoch wants, we can assume, is to see his father’s 
old company end up in a mess of inter-family recrimination. He will fight to avoid that. But the next chief executive of News Corporation may very well not share his surname. Shattering the glass ceiling Another way of bringing greater diversity into the top team of a business is to break the ‘glass ceiling’. Progress on getting more women into boardrooms has been abysmally slow. The percentage figure creeps up a bit every year, but is still short of the 30 per cent target that has been set by... the 30 Per Cent Club. This is a pressure group calling for company boards to try to have women constituting at least 30 per cent of the board members. It’s not a ‘quota’, to which many are opposed. But it is a number to shoot for. Companies in the UK are clearly in the last chance saloon on this issue. Lord Davies and colleagues have been working to re-educate UK companies about the value of diversity. But the chaps just don’t get it. “We’ve never had women on the board,” some say, “so why start now?” Worse: “Women just don’t want to sit on boards,” they argue. “They have other things they’d rather be doing.” If businesses don’t get their act together soon quotas will be imposed, as they have been on the whole successfully, in Norway, Spain and elsewhere. This will be good news. It’s not as though all the men in charge have done such a brilliant job in recent years. Baring Brothers, Lehman Brothers – where are they now? Surely having a few sisters on board might help broaden perspectives and allow boards to take better decisions? ☛ Stefan Stern is director of strategy at PR firm Edelman and visiting professor of practice at Cass Business School
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