Publication Family Business Stewardship

Executive Summary

This report, commissioned by the IFB Research Foundation, sets out an agenda for family business stewardship. It has been informed by the Tomorrow’s Company stewardship principles and by research into and dialogue with family business leaders.

Tomorrow’s Company defines stewardship as: “the active and responsible management of entrusted resources now and in the longer term, so as to hand them in better condition”. Its four principles of stewardship have been developed and adapted to the family business context.

• Setting the course
• Driving performance
• Sensing and shaping the landscape
• Planting for the future

All enduring business success depends upon effective leadership and mutually rewarding relationships. It is through the evolution of these relationships that businesses adapt and prosper. The rapid and unpredictable changes in the global environment make this approach even more vital for all businesses including family businesses. In this report we explore the idea that what makes the best family businesses different in their pursuit of success can be described in terms of stewardship of hour types of capital and they accumulate and have the potential to develop and pass on through the generations:

• Family capital
• People capital
• Financial capital
• Social capital

There is already some evidence that enduring family businesses show stewardship characteristics such as stable leadership, clear purpose, lasting values, a sense of history and a commitment to long-lasting employee and stakeholder relationships. A focus on the four principles can result in stronger stewardship of the family business and open the way to better overall performance in financial and other terms.