Family Business Research Conference 2024: Summary of Proceedings
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. To view the conference programme, click here. 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, including:
How family firms experience crises and respond to rapid social, economic, environmental, and technological change in the UK.
How are family businesses adapting to diverse pressures - for example, social and demographic change, changes in the health and well-being of the UK population, environmental challenges, changes in the UK labour market and work patterns, and financial crisis.
The impact of environmental, social, and governance (ESG) issues on family firms.
How family businesses thrive in challenging times – through resilience, agility, adaptability, and taking the long view.
The conference had the following objectives:
To bring family business researchers, practitioners, and decision-makers together for a multi-disciplinary conversation about the direction of travel for family business research.
To provide an opportunity for researchers to discuss their research priorities, share ideas, and consult with practitioners, family businesses, and decision-makers on the evidence they need.
To explore how research can help address issues and challenges that can arise in family businesses.
To update and share learning from the work of the Family Business Research Foundation, the Centre for Family Business (LUMS), and the Pentland Centre for Sustainability.
Opening session
Prof. Maria Piacentini, Associate Dean for Research at LUMS, welcomed participants and opened the conference. Dr. Allan Discua Cruz – Director of the Centre for Family Business at Lancaster University Business School (LUMS) – introduced the day and the themes to be covered and shared some of the priorities of the Centre. This was followed by a presentation from Sir Michael Bibby, Chairman of the Family Business Research Foundation, who discussed its role in bridging the gap between researchers and universities on the one side and family businesses on the other. He also shared his thoughts on some of the challenges facing family businesses in the UK.
1. Current Challenges Facing Family Firms in the UK
The morning session discussed some of the current challenges facing family businesses in the UK.
Shaping a Moral Backbone
Prof. Nicholas Burton, Director, Centre for Responsible Business, Northumbria University
In his lecture, Professor Nicholas Burton examined the enduring nature of social legacies in family-run enterprises. Contrary to earlier studies that cast doubt on their longevity, Professor Burton’s analysis of case studies from Rathbones and Ben & Jerry’s indicates that such legacies are more robust than once thought. He proposes that these legacies persist not only as traditions within firms but also as quasi-traditions inherent to the firms themselves, surviving even through substantial transformations. Despite not always being apparent to the upper echelons of management, these embedded legacies offer significant value. Professor Burton advocates for a proactive dialogue with senior leaders to maximise the benefits derived from these enduring legacies.
Family Business Research at a Tipping Point
Prof. emeritus Carole Howorth, York University, and Dr. Allan Discua Cruz, Centre for Family Business, LUMS
In her presentation, Professor Carole Howorth discussed the development of family business as a field of research, and pointed to the large body of work in the area appearing in handbooks, including the new Family Business Encyclopaedia she co-authored with Dr. Allan Discua Cruz. She emphasised the importance of bridging the gap between practitioners and researchers and highlighted the potential for family business research to benefit from and contribute to social science disciplines such as psychology. Finally, she touched on some of the emerging research areas in the field, including the study of death and patriarchy in family businesses.
Download slides from Professor Howorth’s presentation here.
The Entrepreneurial Family Galaxy and Some Crucial Challenges for Family Business Prosperity Across Generations
Prof. Alfredo De Massis, Professor of Entrepreneurship and Family Business at IMD, Unibz, and LUMS, Lancaster University
In this presentation, Prof. De Massis shared his thoughts about some of the challenges facing family firms and introduced a novel way of thinking about and navigating the family business ecosystem:
“The world is witnessing dramatic changes brought about by ‘polycrisis’ with significant implications for entrepreneurial families. In this new world, it is important for entrepreneurial families to adopt an ambidextrous entrepreneurial model that can help them to balance, on the one hand, the firm’s wealth and patrimony soul dedicated to managing the family’s financial, human, and socioemotional wealth and, on the other hand, pursuing and exploiting business opportunities. However, these are two very different jobs requiring different sets of capabilities. So achieving this ambidexterity is far from easy. My research highlights the need to broaden our view of how entrepreneurial families create prosperity across generations and to rethink some of the assumptions underpinning the family business research field.
Our forthcoming book draws on the idea of an entrepreneurial family galaxy to set out a roadmap for entrepreneurial families to prosper across generations. This places the entrepreneurial family at the very core of the analysis, recognising its importance within the entrepreneurial ecosystem.
“The idea of an entrepreneurial family galaxy draws attention to the intricate web of relationships and dynamics in which an entrepreneurial family is embedded, seeing it as a source of opportunity. Managing the complexities of a family’s financial and socioemotional assets goes beyond the realm of firms alone. It encompasses a diverse range of organisations that emanate from the entrepreneurial family, such as family offices, family foundations, family holdings, family academies, family museums, family real estate companies, family incubators, family trust companies, etc., which are all organisations belonging to what we label as the entrepreneurial family galaxy.”
Prof. Alfredo De Massis
Download the slides from Prof. De Massis’ presentation here.
Generational Expectations - We've Always Done It This Way: A Practitioner’s View
Sue Howorth and Dave Clarkson, Directors of The Family Business Community
As practitioners working directly with family businesses, Sue and Dave’s presentation focused on the speed of change in the business world and how mid-sized family firms are making themselves more agile - building different structures to enable generations to all have decision-making opportunities; changing the dynamics in the boardroom to include younger team members; creating diversity and opportunities for their business through widening their established values into both family principles and a broader set of business values.
Download the slides for Sue and Dave’s presentation here.
2. What Helps Family Businesses Thrive and Survive in Difficult Times?
The afternoon session focused on two main themes - first of all, it looked at some of the ways that family firms respond to external challenges and crises, which highlighted the themes of resilience and longevity. Then, in the final part of the day, the focus shifted to ESG and family business with a panel discussion and presentation sharing learning from new research in this area.
Panel Discussion: What helps family businesses thrive and survive in difficult times? What are the benefits of longevity and future generations thinking?
A panel discussion Chaired by Prof. Mat Hughes, Professor of Innovation and Entrepreneurship, University of Leicester.
Panellists included:
Matthew Hall, owner of Butler Farmhouse Cheeses Ltd.
Prof. Jan Bebbington, Director, Pentland Centre for Sustainability in Business
Mike Roberts, Deputy Chairman, Frank Roberts & Sons Ltd.
On responding to external shocks and challenges, the panel considered four interrelated questions:
What factors help family businesses prepare for and build resilience to external shocks and challenges?
What role might legacy play in resilience?
How can we introduce future generations to this thinking?
What advice can be given to family businesses to help them survive, overcome, and grow in difficult times?
Professor Hughes’ summary of key messages from this panel discussion:
“Ensure you have built good relationships and goodwill with customers, suppliers, and even competitors to help you get through hard times.
A business must have cash and financial resources to survive crises. Running the business too lean will give the firm a little slack, and without its finances in order, the business is extremely vulnerable to crisis. Cash resources and access to finance allow the business to absorb a shock while it plots its recovery.
Plan ahead. Preparation helps recovery. When growing the business, plan the next phase of growth, such as the next site or next production line, changes in services, etc., so that if something happens to one part of the business, a decisive move or pivot is ready and prepared for, and not rushed or knee-jerk.
Businesses that survive into the long term have distinctive characteristics, including: being clear in terms of their values and purpose; thinking of themselves as stewards for the long term; keeping culture alive through telling stories about the past and future; seeing longevity as a team sport with buy in from key actors; and having protections against losing your way as shocks are experienced.
Using lessons from past crises and drawing on the memories of those who have served in the business (family and nonfamily) for a long time allows the family to educate the next generation on surviving, adapting, and overcoming.
Some businesses are creating formal ‘future generations’ boards (made up of employees, customers, or producer communities) to help them draw down insight from those who are going to be living with the future.”
Prof. Mat Hughes
A Business Family’s Response to COVID
Prof. Jess H. Chua, Distinguished Professor of Family Business, Lancaster University Management School
Professor Chua used the example of the COVID-19 pandemic, to share his family business’s experience of responding to a crisis:
“In a major crisis, survival must come first. Recovery is irrelevant if the family and business do not survive. In terms of survival, people – both family and nonfamily members – are the most critical. Facing uncertainties about the gravity and duration of the epidemic, this included arrangements for isolation, food and supplies, income, vaccination, and education for the younger generation. On the business side, we considered cash, customers, and bank relationships to be most important for both survival and recovery. We conserved cash by suspending investment in new projects, tightening sales credit, and reducing the scale of operations. We triaged the customers in terms of supply and credit according to transaction history, product supply condition, and our market power. We solidified bank relationships in preparation for future crises by exceeding obligations. Recovery was implemented in stages, with concern for people before business.”
Professor Jess Chua
Is the resource-based view really a suitable theory for family business research? Thoughts and reflections from the synthesis of theory and practice
Prof. Dr. Stefan Maerk, Head of Degree Programme SME-Management & Entrepreneurship, FH Salzburg
Prof. Dr. Mario Situm, Director of Studies, Bachelor Business Management, FH Kufstein Tirol Bildungs GmbH & FH Kufstein Tirol International Business School GmbH
In their presentation, Stefan and Mario explored the Resource-Based View's (RBV) relevance to family businesses, focusing on unique, often overlooked (hidden) resources like familial commitment. A specific case study of a small family business was used to examine the ownership structures and role distributions within these businesses. The discussion concluded with challenges in data collection and provided suggestions for future research directions.
Stefan and Mario are editors of Volume 2 of the De Gruyter series on Contemporary Issues in Family Business Entrepreneurship. The new volume will focus on the theme of family business resilience in times of radical change and strategies for managing disruption and exploiting opportunities.
Click here to download the call for papers.
Download the slides from Stefan and Mario’s presentation here.
3. ESG and Family Firms
The third main theme of our conference was ESG in family firms - understanding how and to what extent family firms are using ESG practices and strategies to respond to wider social and environmental challenges is a central theme in the FBRF’s current research programme.
Panel Discussion: ESG in family firms. How does ESG relate to firm purpose and values? How do family firms build ESG into their strategies and operations? What are the practical challenges?
Chair: Prof. Mark Shackleton, Professor of Finance, LUMS, and Pentland Centre for Sustainable Business
Panellists included:
Edwin Booth CBE DL, Executive Chairman, E.H. Booth & Co Ltd.
Alexander Hayward, Executive Fellow, Institute of Entrepreneurship and Private Capital, London Business School
Mairi Mickel, Mairi Mickel’s Business Families
Professor Shackleton’s summary of the topics discussed in this panel discussion, highlighting key learning points:
How does ESG relate to a firm's purpose and values?
“Small and family business leaders naturally understand the importance of nurturing and growing; it is easy for them to extend this thinking to the ecosystem in which their business is situated. Younger generations of family business leaders will always challenge their seniors; this has been happening for generations, and the topical issues over which the up-and-coming leaders are challenging their parents/grandparents are ESG related, with climate up front. I got a sense from the family business leaders on the panel that we saw had no problem communicating goals, inc. ESG, although for other families they are at the start of this discussion. Edwin mentioned that listening to the customer’s voice was key.
Mairi talked twice about the importance of social capital; therefore, rather than just signalling, the real benefit of ESG investment is that other firms and customers feel more attached to your family firm if it is known to be doing the right thing. She also talked about the resurgence of moral sentiment, and the thinking of Adam Smith.”
Built into strategy and operations?
“Yes, principally through the risk management role; the risk manager has to monitor, report, and challenge inside the firm, to the extent that the ESG risks are easy to identify, this is straightforward (Edwin mentioned the carbon foot-printing work done by Mike Berners-Lee for them). As the impact of ESG changes the assessment of risk, this will get harder. Also, it is working if effective scrutiny is in place. It must be remembered that not all family members approach each management issue identically, and we hear witness that non-board family members (shareholders) can and do challenge CEOs.”
Practical challenges:
“The panellists were generally optimistic but highlighted the practical challenges of:
A. Aligning disparate ownership groups
B. Addressing remuneration strategies
C. Ensuring implementation of ESG initiatives had appropriate governance and oversight
The panel commented that conversations around bank lending are becoming more focused in the ESG context, but there is still a lack of regulatory pressure, competitor pressure not to adopt, as well as a lack of knowledge/training and lack of staff engagement.”
Professor Mark Shackleton
ESG in Family Firms: A Review of Research and Practice
Prof. Mat Hughes, Professor of Innovation and Entrepreneurship, University of Leicester
Professor Hughes presented some interim findings from a project commissioned by the Family Business Research Foundation to understand how family firms in the UK are currently approaching ESG, how and to what extent they embed ESG into their strategies and operations, and what benefits, risks, and challenges they face in doing so. The charity is collaborating with a team led by Professor Hughes of family business researchers from three UK universities (Leicester, Loughborough, and Lancaster) to conduct this research.
“ESG has historical roots that trace back to health and safety ideas and corporate social responsibility. Its modern-day origins lie in the UN Global Compact 2004 report, Who cares Wins : Connecting Financial Markets to a Changing World. While it is tempting to think of ESG as consisting of environmental, social, and governance dimensions in isolation, they are intended to be intertwined, and certainly not treated solely as just performance metrics. However, the danger of extensive ESG disclosure requirements is exactly that: the meaning of ESG activities is lost against the necessity to demonstrate outcomes or activities against them. In family businesses, especially, ESG must reflect the family's values and commitment to sustainable development and long-term success.
ESG issues widely permeate the public consciousness. The direction of travel generated by social pressure, activists, international bodies, and government regulation points to an unrelenting forward pressure on businesses to increase their ESG activities and demonstrate their achievements against ESG metrics. ESG disclosure is becoming irreversible, and requirements around ESG and its auditing are almost certain to continue growing. ESG disclosure requirements in the UK are based on the International Sustainability Standards Board (ISSB) issued two inaugural standards - IFRS S1 and IFRS S2. These call for disclosure and measurement of governance processes, controls, and procedures, strategy, process, and performance on managing sustainability-related and climate-related risks to the business and its prospects.
Family businesses are well-placed when it comes to the ESG agenda owing to the family often identifying with this community, the heritage of the family and business, their tendency to conduct business with pride and family values, and, of course, a desire to pass on to the next generation.
Emerging action points to date include:
Data is king; narrative is queen: A large amount of episodic data is needed to track the firm’s achievement against sustainability disclosure requirements, but the true added value lies in the stories the business can tell about ESG.
Stakeholder engagement and compromise: it is impossible to please every stakeholder to the same degree, and the family business will have little choice but to compromise.
Greenwashing and the danger of hypocrisy: ensure that rhetoric and reality line up or risk claims of ‘greenwashing’ (using ESG activities to exaggerate sustainability and good practice when other business activities are detrimental environmentally, socially, or in governance).
The silent majority? SMEs are currently on the periphery of ESG regulations and debates. ESG regulations are extensive but apply to large firms. They will inevitably trickle down and apply to SMEs, but in what form? SMEs need a voice to lobby governments on ESG standards and reporting.
Existing research on family firms and ESG is dominated by quantitative studies, many of which look at financial returns from ESG endeavours. More qualitative research is needed, and we need to see more appropriate dependent variables in quantitative studies. It is illogical to think of ESG in terms of financial gain and maximising firm performance.”
Professor Mat Hughes
Download the slides from Professor Hughes’s presentation here.
Navigating Non-Family CEO Succession
Dr. Manish Singh, Cranfield Management School
In the final session of the day, Dr. Manish Singh launched new evidence-based guidance from the Family Business Research Foundation addressing the challenges faced by family businesses during leadership transitions when a non-family member is chosen for the CEO role. He introduced a new guide titled "Navigating Non-Family CEO Succession," developed in collaboration with Dr. Martin Kemp of the Family Business Research Foundation, Prof. Stephanie Hussels of Cranfield University, and Prof. Patrick Reinmoeller of IMD. This guide equips business-owning families and their advisors with the tools to navigate potential pitfalls during such transitions, ensuring a smooth and successful handover of leadership.
Dr Martin Kemp, Family Business Research Foundation