Index
Accountants, 83
AGM. See Annual general meeting (AGM)
Altruism, 125
Annual general meeting (AGM), 71, 125
Annual performance evaluation, 118
Annual shareholder meeting, 72, 73–74, 125
Asian family businesses, 88–89
Attorney, 57
Audit committee, 125
Berkshire Hathaway Inc., corporate governance guidelines
annual performance evaluation, 118
board meetings, 116
board size and committees, 114
director access to management and advisors, 116
director compensation, 116–117
director qualifications, 113
director responsibilities, 115–116
executive sessions, 116
management succession, 117
orientation and continuing education, 117
public disclosure, 118
Board committees, 65
Board meetings, 116
Board of advisors, 5, 55–56, 82, 125
Board of directors (BOD), 35–36, 52, 53, 82
family businesses, 62
family-controlled Estee Lauder Companies, 67
governance of business
Board size and committees, 114
Business first business, 12
Business mission statement, 39–40, 42–43
Business-owning family, 25, 27, 34, 48
Business shareholder meeting, 77
Buy-sell agreements, 84
Case studies
absentee owner and the in-law, 108–110
being heard, 105
charity case, 111
missing in action brother, 99–100
out-of-the-loop family shareholder, 100–101
overbearing patriarch, 104
power struggle with BOD, 110–111
pruning the family tree, 112
substance abusing family employee, 101–102
CFA. See Chick-fil-A (CFA)
Chairman, duality of roles, 64–65
Chairman of the board, 125
California Transparency in Supply Chains Act of 2010, 119–120
Chief executive officer (CEO), 5, 59, 89, 125
small one-generation family-owned firm, 93
Chief financial officer (CFO), 5
Chief operating officer (COO), 5
Commitment, 125
Communication
generational meetings, 46
improvement in professionalism, 82
shareholders council, 71
Compensation, 21
Compensation committee, 125
Compensation for directors, 63–64
Competitions and games, 45
Competitive advantage, 125
Conflict of interest, 125
Conflict prevention, 82
conflict and dysfunction, prevention, 48–49
suggested outline/questions for creation, 50–51
Control, 126
Corporate governance. See also Business governance
Asian family businesses, 88–89
Berkshire Hathaway Inc.
annual performance evaluation, 118
board meetings, 116
board size and committees, 114
director access to management and advisors, 116
director compensation, 116–117
director qualifications, 113
director responsibilities, 115–116
executive sessions, 116
management succession, 117
orientation and continuing education, 117
public disclosure, 118
corporate social responsibility, 88
stakeholders, 88
statement of, 69
transparency, 87
women in family business, 89
working with nonfamily management, 89–90
Corporate social responsibility (CSR), 23, 88, 126
Corporate stakeholder relationship director, 84
Council, of family, 51
Counselors, 83
Cousin consortium, 126
CSR. See Corporate social responsibility (CSR)
Culture, 126
Decision maker, 33
Decision making
authority, 89
improvement in professionalism, 81–82
tool, 39
Directors, 126
qualifications, 113
Dual agency, 20
Dual class shares, 126
Dual roles, 126
Enterprise Holdings Inc., 5
Entrepreneur, 126
Entrepreneurial orientation (EO), 14, 126
Estate planners, 83
Estee Lauder Board of Directors (2018), 67–68
Executive sessions, 116
Explicit knowledge, 126
Family, 126
Family business, 126
concept of, 3
family-controlled businesses, 7–9
family first or business first, 12
family-owned businesses, 7
generational succession, 18
governance, 22
multiple generations, 4
nonfamily businesses different with, 9–11
professionalism, 4
pruning the family tree, 17–18
publicly held firms, 5
triangulation, 17
Family Business Magazine, 123
Family-business managers, 70
Family Business Network (FBN), 123
Family-business owners, 68
Family business theories
resource-based view, 22
social capital theory, 24
social identity theory, 26
socioemotional wealth approach, 26–27
Family constitution, 127
Family-controlled businesses, 7–9, 91, 127
Family-controlled corporate mission, 40
Family-controlled firms, 22
Family-controlled News Corp., 66
Family council, 71, 72, 82, 127
Family employees, 127
Family Enterprise USA (FEUSA), 123
Family firm
estate planning, 84
financial performance, 12–14, 93
governance
governance of ownership, 36
governance responsibilities, 37
values associated with, 40
Family Firm Institute (FFI), 83
Family first business, 12
Family-friendly insiders, 8
Family governance
assembly of, 46
Bacardi Limited, 41
business mission statement, 39–40, 42–43
Chick-fil-A, 41
conflict and dysfunction, prevention, 48–49
suggested outline/questions for creation, 50–51
council, 51
family-controlled corporate mission, 40
generational meetings, 46
goals, 43
Hallmark Cards, 42
interaction with board, 53
large family-owned statements, 40
mission, 39
nonvoting stock, 57
objectives, 43
purpose statements, 40
questions for next generation, 54–55
Family-managed firms, 82
Family management, 88
Family meetings, 43–44, 82, 127
Family mission statement, 39–40
Family-owned automotive dealership, 44
Family-owned Bacardi Limited, 41
Family-owned businesses, 4, 5, 7, 25, 39, 91
Family-owned firms, 82
Family-owned lawnmower, 6
Family owners/employees, 44
Family roles, 127
Family therapists, 83
Financial accountability legislation, 87
Financial capital, 3
Financial crisis, 34
Financial performance, family business, 12–14
Founder, 127
Founder centrality, 11
Generational meetings, 46
Generational shadow. See Founder centrality
Governance, 93, 127. See also Family firm governance
Governance of business
board committees, 65
board evaluation, 69
BOD. See also Board of directors (BOD)
choosing independent directors, 68
Estee Lauder Board of Directors (2018), 67–68
family council, 66
statement of corporate governance, 69
Governance of ownership, 36
AGM. See Annual general meeting (AGM)
Hallmark Cards, 42
Herschend Family Entertainment, 63
Hobby Lobby, 5
Human capital, 127
Independence, 127
Independent directors, 113, 121–122
Initial public offering (IPO), 3
Institute for Family Business (IFB), 124
Insurance agents, 83
Insurance professionals, 83
Intergenerational succession, 18
International Family Enterprise Research Academy (IFERA), 123
International Finance Corporation, 121–122
IPO. See Initial public offering (IPO)
Italian-based Beretta Firearms Company, 10
Large family-owned statements, 40
Lawyers, 83
Leadership, 72
Leadership succession, 33
Legacy, 128
Low-cost family employees, 3
Management, 128
Management succession, 117
MassMutual Financial Group, 89
Material interest, 122
Mission statement, 128
Mom-and-pop’s. See Family business
Multibillion-dollar automotive company, 8
Multibillion-dollar worldwide media company, 66
Multifamily office (MFO), 85
New York Stock Exchange rules, 66
Nomination committee of board of directors, 128
Nonemployed family members, 128
Nonfamily businesses, 22
different with family business, 9–11
Non-family CEOs, 94
Nonfamily employees, 128
Nonfamily-owned businesses, 10
Nonvoting stock, 57
OECD. See Organisation for Economic Co-operation and Development (OECD)
Organisation for Economic Co-operation and Development (OECD), 14
Orientation and continuing education, 117
Outside stakeholders, 4
Outside-the-family shareholders, 7
Owners, 128
Ownership control, 6
Ownership governance
annual shareholder meeting, 73–74
small family business shareholder meeting, 77
Patient financial capital, 3
Personnel decisions, 90
Pittsburgh Plate Glass (PPG) Company, 85
Principal-agent problem, 20
Private business ownership, 3
Private investor, 5
Professionalism, 32, 44, 48, 69, 93, 94
communication improvement, 82
conflict prevention, 82
decision making improvement, 81–82
family business, 4
family business professionals, 83–84
stakeholder management, 84
Public business ownership, 3
Public corporations, 3
Public disclosure, 118
Public family-controlled business, 91
Publicly held firms, 5
Public shareholders, 4
Qualified independent directors, 114, 115
Quick decision making, 9
RBV. See Resource-based view (RBV)
Resource-based view (RBV), 22, 24, 128
Sarbanes-Oxley Financial Accountability Act (Sarbox), 5, 60–61, 87
Securities and Exchange Commission (SEC), 4
Self-dealing, 20
Self-governance, 32
SEW approach. See Socioemotional wealth (SEW) approach
Shareholder assembly, 128
Sibling rivalry, 128
6th Annual 2016 Private Company Board Compensation Survey, 63
Small and medium-sized enterprises (SMEs), 3
shareholder meeting, 77
SMEs. See Small and medium-sized enterprises (SMEs)
Social capital theory, 24, 128
Social identity theory, 26, 128
Social network, 128
Socioemotional wealth (SEW) approach, 26–27, 52, 90, 128–129
Stakeholders, 4, 5, 8, 39, 84, 129
annual meeting, 53
corporate governance, 88
Starbucks, 23
Stockholders (or shareholders), 129
Strategic planning, 129
Succession, 129
Systems approach, 129
family business theories, 24–26
Tacit knowledge, 129
Tax attorneys, 83
Tharawat Family Business Forum, 124
Three-circle model. See Systems approach
Top management team (TMT), 11, 56, 59, 129
Transparency, 129
corporate governance, 87
United States Association of Small Business and Entrepreneurship (USASBE), 123
University-based family business centers, 46
Unprofessional family business, 10
U.S.-based firms, 90
Warren Buffet-controlled Berkshire Hathaway Inc., 8
Women, in family business, 89