Latest Update from the Family Business Research Foundation

Research Highlights

FBRF Commissions Cebr to deliver 2024 Family Business Sector Report

The Family Business Research Foundation (FBRF) has partnered with Cebr, one of the UK’s leading economic consultancies, to deliver this year’s Family Business Sector Report. Work on the project started in August 2024. This project will provide critical insights into the current state of family-owned businesses in the UK and their significant contribution to the national economy. There is a need for up-to-date, comprehensive economic data on the sector.

The new research addresses this gap by investigating the size and structure of the sector and assessing the contribution that family firms make to the UK economy: quantifying their overall economic impact, including their contribution to GDP, employment, and the tax contribution they make to the public finances. The primary goal of the project is to enhance the understanding of family businesses' role in the UK economy to ensure policy is based on the best possible evidence as well as to promote further research in the field.

The findings from the study will provide a valuable resource for family businesses, government bodies, and advisory professionals. It will offer new data and perspectives to inform business strategies, shape government policy, and strengthen the long-term sustainability of family-owned businesses in the UK. The 2024 Family Business Sector Report is expected to be published early in 2025.

New Research on Business Property Relief

The Family Business Research Foundation has conducted an initial review of the effect of changes to Business Property Relief (BPR). The findings showed that there was plenty of evidence as to the tax saved by applying BPR, but limited data and evidence available to assess the impact of these changes. A tender is therefore to be conducted on research to understand the impact of changes made to the relief in the budget.

ESG and Family Business

In January 2024, the Family Business Research Foundation commissioned a team of family business researchers from three UK universities (Leicester, Loughborough, and Lancaster) to carry out a review of the research on ESG in family firms, together with a review of ESG-related policies and regulations and to assess their relevance to UK family businesses. The findings from this project will inform new research on ESG in family firms and the development of new practice guidance for UK family firms in the second stage of the project (2025). This article by Dr Martin Kemp from the FBRF discusses the topic of ESG in family firms: https://www.fbrf.org.uk/articles/family-businesses-and-esg

This article by Professor Mat Hughes (Leicester University) summarises some of the early findings from the project: https://www.fbrf.org.uk/articles/esg-practices-in-family-firms-emerging-findings-from-review-of-the-evidence

The full report is due to be published in December 2024.

New Challenges Guide on non-family CEO succession

The Family Business Research Foundation has collaborated with Cranfield School of Management to produce new evidence-based guidance and resources on succession to non-family leadership in family firms. The guidance is designed to help business-owning families and those who run or advise family businesses navigate the pitfalls and challenges that can occur during leadership transitions. A case study (Bettys & Taylors Group) is used to highlight some of the issues that can arise during leadership transitions in family-owned firms. The guidance can be downloaded here: https://www.fbrf.org.uk/s/Family-Business-Challenge-Guide-20.pdf

New Report on the Governance Practices of UK Family Businesses

A new report published by the Family Business Research Foundation sheds light on the corporate governance practices of UK family businesses, focusing on their adoption of the Wates Principles. The research reveals that while family-owned firms are more likely to adopt the Wates Principles than their non-family counterparts, gaps remain in areas like board composition and director accountability.

The report underscores the need for improved disclosures and governance practices in family businesses to strengthen stakeholder trust and long-term sustainability. It also calls for further guidance to support family firms in aligning with governance best practices, an issue increasingly important in the UK’s evolving regulatory landscape. Read the full report here: https://www.fbrf.org.uk/s/Wates-Principles-and-Family-Business-Report-Final.pdf

How Common are Family Firms in the UK?

This short report by Martin Kemp, FBRF, shares some of the results relating to family-owned SMEs from the latest UK Longitudinal Small Business Survey. It draws on survey results released by the Department for Business and Trade (DBT) for SME employers during the period 2019 to 2023 to examine rates of family-business ownership among SMEs over this period. The report and pdf download can be accessed here: https://www.fbrf.org.uk/reports/how-common-are-family-firms

“Thriving in Challenging Times” - Family Business Research Conference 2024

The Family Business Research Foundation’s annual research conference (“Thriving in challenging times: how family businesses navigate crisis, complexity, and uncertainty”) took place on May 20, 2024, in collaboration with Lancaster University Management School’s Centre for Family Business and the Pentland Centre for Sustainability in Business. Practitioners, family business owners, researchers, advisers, and consultants came together to explore some of the challenges facing family firms in the UK today and how they are responding to these challenges. The event was held both in-person and online, with around 135 people taking part (63 in-person, 72 online), and explored a set of questions relevant to family business practitioners and researchers. A Summary of Proceedings from the 2024 conference available here: https://www.fbrf.org.uk/past-events/familybizresearchconference2024#

Management and Wellbeing Practices in Family Firms

The Research Foundation is using data from the UK government’s Management and Wellbeing Practices Survey to study employer practices and policies among family-owned firms and how they differ from non-family firms. More detail about the project can be found here https://www.fbrf.org.uk/articles/understanding-employer-practices-in-family-businesses This new project builds on an earlier study by the Research Foundation published in 2013 (Family Business People Capital) which looked at human resource practices in family-run businesses.

Total Tax Contribution of Family Firms

During 2023, the Research Foundation worked closely with PwC to study the Total Tax Contribution (TTC) of family firms in the UK. The project aimed to accurately estimate UK family businesses' tax contributions and develop a replicable methodology for producing these estimates periodically. The final research report for the TTC study is available here: https://www.fbrf.org.uk/reports/total-tax-contribution-of-uk-family-businesses

 An infographics/briefing version of key findings can be downloaded here: https://www.fbrf.org.uk/s/IFBResearchFoundationTTCinfographicfinal.pdf

 Since publication, the findings have been widely disseminated among family businesses, politicians, advisers, economists and finance specialists, and the international research community. For example, an article sharing learning from the study has been published in CampdenFB: https://www.campdenfb.com/index.php/article/tax-transparency-pays-off

Further Work Planned

Over the next year, the Charity plans to develop new research and produce new practical guidance to support family businesses. The Sector Report remains the key source of many family statistics in the UK and the updated findings will be reported shortly. Currently scheduled projects for 2025 include:

ESG research (stage 2) and a new Challenges Guide on ESG in Family Firms

Based on the recommendations from our review of ESG research and policies, new research will be undertaken in 2025 to understand how family firms in the UK are currently approaching ESG, how and to what extent they embed ESG in their strategies and operations, and what benefits, risks, and challenges they face in doing so. As part of this project, a new Challenges Guide on ESG in Family Firms will be produced.

New research on Business Property Relief

As noted above, further research to understand the impact of any changes to BPR will be commissioned soon after the Budget.

Identifying Family Firms and Building a Comprehensive UK Family Business Database using AI/machine learning

The charity is currently in discussions with academic partners about how it can use AI/machine learning to help identify family firms and build its family business database. This will continue to be a focus of activity in 2025.

Organisational Changes at the Research Foundation

Family Business UK & the Family Business Research Foundation have issued a joint statement on the future structure of the two organisations. They have been reviewing how to improve their capability to achieve their shared goal – to create the environment to allow family businesses in the UK to thrive. Click here to read the joint statement from Sir James Wates, Chairman of Family Business UK, and Sir Michael Bibby, Chairman of the Family Business Research Foundation

Sharing Your Research

If you have new research or evidence-based insights you want to share with the UK family businesses and the family business research community in the UK, please get in touch with us at info@fbrf.org.uk

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Share our work with your network. To find out more about the charity and to access all our evidence-based guidance, publications and family business insights, go to www.fbrf.org.uk

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