Board Architecture and Family Companies

Family businesses account for 66 per cent of all businesses across the world. In the US they generate $1.5 trillion of the gross national product and total 1.7 million businesses (Mueller: viii). In Germany 60 per cent of the mainly family-owned Mittelstand companies, like Porsche and Haribo, are among the world’s top five in their sector and account for about 20 per cent of Germany’s DM900 billion in exports. Others cite even larger numbers of family companies depending on the definition of a family business and whether they have opted for the corporate form (Shanker and Astrachan). The family business and family companies are a very significant business structure. The variety of companies that fall within just this one category is enormous, reflecting the different paths family companies have taken in their survival through the generations of family owners. Some are large listed companies, like Sainsbury’s, Fiat, and Ford. In Sweden the major engineering companies are nearly all controlled by ten families. These are companies that have survived the transition through the generations with a large proportion of stock remaining in the family. They have developed so effectively in Sweden because ‘Local rivalry, little protection in the home market, and early internationalization have added to the challenges to innovate and upgrade competitive advantage’. (Solvell, Zander and Porter: 139)