Leadership and Governance in Family Enterprises


I attended a very interesting summit of Turkish and German family entrepreneurs at the beginning of June in Istanbul. The conference was held at thevhistoric summer residence of the German embassador in Tarabya – a gorgeous house on the Bosporous with the most amazing gardens.

Most of the world’s best performing companies are family owned. They are job creators and drivers of growth in today’s often frazzled markets. But being a family enterprise often poses risks. Discord amongst family members, succession issues, ensuring smooth transitions amongst the generations. All these issues can make or break a family enterprise. And this is where leadership and governance come into play. They are the glue that keep family enterprises together. For generations to come. Or at least can. It is all about managing this “golden triangle” between family, management and ownership.

But how do companies manage to keep all these in balance?  Many may have so-called family constitutions, others have put some type of family shareholder governance into place. And having rules in place to govern is necessary and part of a professionally run company. But there is always something that is missing from a contract. One of the most important factors in keeping family enterprises running is to be able to pass along the common values and to keep an open dialogue amongst all family members. This needs to be installed from an early age on.

But succession planning is also just as important. Family enterprises that are looking for growth and long term continuation need to make sure there is an open path for the next generation to move up sooner rather than later. The older generation needs to give the next enough time so that there is less pressure to succeed and room for failure.   Governments are mostly only liable for 4 years. Management in big corporations only live on 5 year plans. There is no one really liable for ensuring the long term continuation. They are not invested in their undertakings. Emotionally and monetarily. And that is why family enterprises and entrepreneurship are the drivers of the future. And leadership and governance are the cornerstones that keep these enterprises on track and successful for generations to come.

This was the second time that the confererence was held and it is a great opportunity for dialogue and business opportunities and I would like to thank Alphazirkel for the wonderful organization.

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