Borrowed from Your Grandchildren by Dennis T. Jaffe

Author:Dennis T. Jaffe [Jaffe, Dennis T.]
Language: eng
Format: epub
ISBN: 9781119573814
Publisher: Wiley
Published: 2020-02-26T00:00:00+00:00

Beyond Self-Interest: Becoming Stewards

What does it mean to be an owner of a family enterprise? Family members go through a learning process to take up this complex role. Responsible family owners develop the capability to oversee businesses and investments that may have grown to huge proportions. In many family businesses, serving on the board is a passive activity: attending an annual meeting, hearing a report from the CEO, and then having a good dinner. Taking this stance, however, defers authority to the CEO, who may or may not be a family member, with the board just making sure that profits are delivered to the owners. This does not allow the board to oversee the broader goals and values of the family, or to push the enterprise in new directions.

Every family enterprise must consider what kind of owners that family members want to be. A generative family embodies active, engaged ownership, actively engaged in the values and culture of its family enterprise. They are informed and create a vision for their various ventures. The family owners see themselves as stewards, producing wealth that has lasting and appreciating value with an eye toward providing for generations to come. Together, family owners share values and are aligned about what they want and where they are going. As owner/stewards, they are active, thoughtful, vigilant, and resilient in how they exercise their care for the family enterprises. Stewardship is difficult to mandate; it is a complex conception of responsibility that is part of the culture of the family enterprise. It is learned, absorbed, accepted, and internalized by the whole extended family, and it needs both time and talent from family owners.

Even though ownership is dispersed among many family members, the family wants to ensure that control over major decisions is in the hands of those who protect and look after all family members, not just the most prominent current owners. Many family enterprises are weakened because individual needs are not subjugated to those of the family as a whole. Stewardship arises when owners shift from maintaining a personal agenda to considering the best interests of all the family stakeholders. Such owners may even go beyond the family, adding concern for nonfamily leaders, employees, and others in the community. Stewardship is a form of self-interested altruism.

Active owner/stewards see themselves as answering to several nonowner stakeholder constituencies:

Nonowning family members, especially the rising generations of young family members and married-in family members

Employees, suppliers, and customers who can be deeply connected to the family

Community members who are affected by them and who influence their actions

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