Session-6 Synopsis
The session featured Dr. Josh Baron (Partner and Co-Founder of Banyan Global, a Family Business Advisory) as an expert speaker, and was moderated by Peter Leach (Founder and Chairman, Peter Leach Associates Ltd.), and Tatwamasi Dixit (Founder, FABRIC). Family businesses are famous for power plays, backstabbing, and dramatic implosions. Yet they are also among the most enduring companies in existence, central to economies and communities around the world. In this session, the discussion was about how harnessing the power of ownership effectively, can make the difference between long-term success and failure.
Dr. Baron discussed the 5 rights framework – Design, Decide, Value, Inform and Transfer. According to him, there are three important questions – 1. What do we want to own together? 2. Who are all the Owners? Should all of them share everything at the same level and what should be their scope? 3. How do they share control?
The panelists discussed the popular notion of separation of ownership and management. It was noticed that in an Indian context, the custodian mindset is prevalent. Ownership and Management are inter-twined. Often, the power of ownership hardly goes to the entire family owners group and decisions are made among the working members of the family on behalf of all the owners. On this a 4 room model for governance was described such that members take on different roles in each of the rooms – manager, board member, family member or owner. This may help them in making decisions as it would help to sort out their roles in various capacities.
Dr. Baron pointed out that there is a difference between relationships among family members based on the legal structure of shareholding versus the cultural model of ownership. Ultimately what keeps a family working together successfully depends on the cultural model. Overall, the panelists highlighted that several of the issues faced with regard to ownership rights in family businesses are cultural in nature. This must be managed well in building relationships and good communication practices.
About the Speaker
Mr. Dr. Josh Baron:
Dr. Josh Baron is a co-founder and Partner at BanyanGlobal. For the last decade, he has worked closely with families who own assets together, such as operating companies, family foundations, and family offices. He helps these families to define their purpose as owners and to establish the structures, strategies, and skills they need to accomplish their goals. Josh is also an Adjunct Professor at Columbia Business School, where he teaches MBA courses on Family Business Management and Managing Conflict in Family Business. He also teaches in the Enterprising Families Executive Education Program.
He is a member of Mulliez family and was also appointed to the family council during the last 16 years
In Association Familiale Mulliez (AFM), a 100- year old holding company of Mulliez family- He is in-charge of family cohesion and entrepreneurship development
Mr. Antoine is also the chairman of the family Equity fund, "CreAdev", which would assist family or non- family young entrepreneurs, hence promoting the entrepreneurial spirit and helping to develop the AFM portfolio
About the Moderators
Mr. Peter Leach:
Mr. Peter Leach is widely regarded as one of the founding fathers of family business thinking in the UK, Peter has been a leader in his field for over 30 years, consulting with diverse families all over the world. He is an Adjunct Professor of family business at Imperial College Business School and has written a number of books including Family Business The Essentials published in the UK by Profile Books and is co-author of Indian Family Business Mantras, published by Rupa publishing.
Mr. Sri Tatwamasi Dixit:
Sri Tatwamasi Dixit is a well-known family business advisor and spiritual leader who works with family businesses across the world. He is internationally recognized for his knowledge and application of the wisdom of the Vedas. Sri Dixit draws on his extensive experience in commercial and management practices to help family businesses work on balancing and blending family and business priorities.