January 2021

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Stewardship for Long Lasting Family Firms

Families that have been successful in maintaining their legacy and wealth over time, have done so by instilling a sense of stewardship in their family members and especially children / next generation.

The steward perspective in family business means to receive the business from predecessors, grow the business, the family wealth, the family itself, and then pass this multifaceted inheritance on to the next generation in better shape than it was in when it was received. Stewardship of a family business aims at building health and vigor and creating an ever greater family legacy.

A “Steward” is likely to be emotionally committed to the family firm. To such a person, legacy is important. On the other hand, an “Inheritor” sees their ownership in simple financial terms. Such a person is more like an arms-length investor. An inheritor mindset may lack the sense of togetherness with their other siblings and may sometimes even lack emotional commitment to the family firm. In terms of family culture, a person who is a “Steward” has an inward looking orientation i.e. they tend to look in towards the family unit. A person who is an “Inheritor” looks outward. This means they tend to look away from the family unit and they like their independence.

A sense of stewardship is also necessary when planning for succession in the family business. Succession planning typically focusing on selecting good management, but the development of strong owners is critical. Without a culture of stewardship, good management can be sabotaged by entitled owners. Entitlement leads to passiveness about how the company is run and managed and an unwillingness to reinvest in new initiatives.

Through successful stewardship, your family business can build a strong and long lasting legacy.

Featured Video Paternalism to Partnership- Dennis Jaffe

Essentials of Governance in Family Institute
An Awareness Session

Facilitated by PFBI

In Collaboration with in collaboration with Yi Delhi, Kolkata, and Mumbai Chapters

Speakers Mr. Aniruddha Ganguly Dr. Manesa K Kakulavarapu

Date 14th December, 2020

More Awareness Programs

The program helped participants gain insights into the diverse and complex dynamics involved in managing and sustaining family owned enterprises over generations.

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PFBI Connect is conceptualised, designed, edited and published by PFBI. All the articles and news are researched, selected and suitably edited at the discretion of the editorial team. All rights reserved. Information and data featured in PFBI Connect cannot be printed or reproduced without prior approval.

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