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When the cover story of The Economist proclaims "The Rise of the Family Office," we can be pretty sure that it's no longer only a fancy name for a holding company. However, sustainable growth within this fast-evolving world of family firms requires an agile, proactive approach and a thorough understanding of the emerging trends, risks and opportunities that families will need to tackle.
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The former officers and directors of Yahoo agreed to pay $29 million to settle charges that they breached their fiduciary duties in their handling of customer data during a series of cyberattacks from 2013 until 2016. Three billion Yahoo user accounts were compromised in the attacks. The settlement ended three so-called derivative lawsuits filed in Delaware and California against the company’s former leadership team and board, including Marissa Mayer, Yahoo’s former chief executive. Insurance coverage will pick up the tab.
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The start of 2019 signals the start of prediction season. This year there’s plenty of grand forecasts about geopolitical and macroeconomic changes from trade wars to a cooling Chinese, US, and global economy in a year of transformation and disruption.
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The number of Fortune 500 companies whose boards are more than 40% diverse has more than doubled in six years, said results of a study published by the Alliance for Board Diversity in collaboration with Deloitte.
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Recent news reports relating to the withdrawal of a non-executive director up for re-election due to his non-attendance at meetings for four years by Purple, a JSE-listed company, highlight one critical area of a director’s responsibility: the necessity to attend board meetings. Parmi Natesan, CEO Elect of the Institute of Directors in Southern Africa (IoDSA) says that King IV recommends that attendance at board meetings is an important responsibility for directors.
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Two recent insights aimed to demonstrate how good private equity is for family offices and high-net-worth individuals (HNWIs). A webinar hosted by Private Equity Wire set out to show that “private equity fund innovation (is) opening the doors to mass affluent investors”. And a report by Northern Trust Global Family Office and Private Investment Offices Group and the Wharton Global Family Alliance (GFA) declares that “family offices see private equity as key to future returns”.
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In China’s rise to become an economy to rival the United States, few played a role as key as the country’s private companies. These businesses are mostly run by men, usually in manufacturing and real estate, and nearly all owned by families. But like in many families, things can get tricky when it comes to succession. China is about to be hit by a wave of retirements of aging business titans who don’t always have a solid plan for what’s next – or even children who want to carry on the family business.
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Even among companies working at scale with the Internet of Things, there’s a wide gap between top and bottom performers. Nine practices distinguish the leaders from their less successful peers. For all the excitement that has built up around the Internet of Things (IoT)—the network of digitally connected devices whose economic value could amount to trillions of dollars per year—the IoT’s impact varies greatly from one company to next. Many enterprises have launched pilot projects to develop IoT-enabled products and services or use the IoT to achieve operational improvements. Of these, less than 30 percent have taken their IoT programs beyond the pilot phase, according to our research.
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As the Fourth Industrial Revolution becomes ever more pervasive, we have good and bad news for leaders of incumbent businesses in all sectors and all geographies. We spent a large part of last year analysing the performance of the business models of the world’s leading companies. By “business model” we mean the overall, interdependent system by which an organization creates value for customers and captures value for itself. This includes its propositions, products, resources, processes, revenue streams and cost structures.
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Large companies — those worth $5 billion or more — appointed nearly three times as many women as men to their boards of directors during the second and third quarters last year, showing just how eager they are to diversify their governance teams and comply with mounting pressure for equality. “The more women board directors a company has in the past, the more women corporate officers it will have in the future,” concluded a 2008 study by Catalyst, a nonprofit organization that promotes women in the workplace.
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Of the 28.8 million small businesses in the U.S. 19% are family-owned. As that type of business grows and evolves, it begins to benefit from the many generations running the day-to-day operations. Here are five ways a family business can benefit by including veteran and rookie family members alike.
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Locally orientated, ‘risk lite’, with a strong preservation ethic. This has been the traditional profile of Indian family investments, dominated by senior wealth holders with a preference for safe and steady assets. Fuelled by operating businesses where any profits have been funnelled back into the business, diversification has traditionally meant investing in subsidiaries of the family business or real estate, rather than new asset classes. Yet could a new breed of family investors with a desire to professionalise private investment be set to break this mould?
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Ask anyone to identify a family business they might know, and most would probably name a small company in their neighbourhood or community. Perhaps the father and son-run electrician or the Main Street florist shop now owned by the second generation. Most companies in the world are young and small, and most family businesses are young and small (that’s always been the case, and that will always be the case). So, it’s easy to mistakenly conclude that family company equals small business.
