Topics of Family Business Governance: Insights on Structures, Strategies, and Executives

Preface
Contents
About the Authors
Part I: The Design of Boards for Comprehensive Tasks and Efficient Processes
	Introduction
	Exploring the Topics of Governance
		Bibliography
	Modules and Tasks of Governance
		1 The Relevance
		2 Statutory Rights and Obligations for Processes Which Are Based on Law or Shareholder Agreements
		3 Monitoring the Activities of the Leadership and the Development of the Company
			3.1 Monitoring as the Right to Ask for Reports
			3.2 Monitoring the Situation the Company Is in and Its Development
			3.3 Monitoring the Compliance
			3.4 Monitoring the Performance of the Management and Evaluating the Fit Between Person and Task
			3.5 Monitoring Leads to Structuring the Processes of the Ones Who Report
		4 Directing the Management
			4.1 Outright Instruction
			4.2 Authority to Approve or Reject Proposed Decisions
			4.3 Conflict Resolution in Case of Disagreements Among the Direct Reports
		5 The Instruments of Indirect Leadership
			5.1 Self-Steering
			5.2 Cooperative Opinion-Forming
			5.3 Context-Based Steering
			5.4 The Competence-Based Versus the Authority-Based Governance Functions
			5.5 Advisory
		Bibliography
	One-Tier and Two-Tier Boards
		1 The Relevance
		2 The Basic Design
		3 Some of the Arguments
		4 Atmosphere
		Bibliography
	Design Parameters of a Board for Family Enterprises
		1 Variety of Basic Designs
		2 A Checklist
		Bibliography
	Governance for the Lone Founder
		1 The Relevance
		2 The Need
		3 The Implementation
		4 The Role of the Chairman
		Bibliography
	Agenda Setting: Clarifying the Strategic Situation and the Challenges
		1 The Relevance
		2 Timeframe
		3 Categories of Agenda Items
		4 Overview of Events Since the Last Session
		5 General Review of All Important Topics: Not Only the Urgent Ones
		6 Emphasizing the Urgent Needs Too
		Bibliography
	Monitoring: We Need Meaningful Data
		1 The Relevance
		2 Too Much and Too Detailed Data Without Verbal Explanation
		3 Focus Primarily on Budget Comparisons
		4 Unconsolidated Data
		5 Changing the Organization Structure or the Business Year or any Similar Basic Structure
		6 Intransparent Accruals and Intra-Year Adjustments
		7 Insufficient Time Frames
		8 Too Much Focus on Effects Only and Neglecting the Causes
		9 Too Much Focus on the Average and Neglecting the Span of Deviations from Average
		10 Too Much Focus on Costs and Neglecting the Price Quality
		11 Not Drilling Down to the Details but Revealing the Essentials
		Bibliography
	The Difficult Task of Advising
		1 The Task of Advising
		2 The Advisory Role of a Board
		3 The Importance of Advice
		4 Advising Implies Searching for Solutions
		5 Some Prerequisites for Successful Advising
			5.1 Curiosity
			5.2 Competence
			5.3 Independence Without Prejudice
			5.4 Competence in Communication
			5.5 Time for Reflection
		6 From Deliberation to Resolution
		7 Consulting as an Integral Part Between Supervision and Control
		Bibliography
	To Create a Sense of Urgency
		1 The Relevance
		2 The Problem
		3 Tools for Setting Priorities
		4 Good Times as Warning Signal
		Bibliography
	The Board´s Key Role During a Crisis: Such as COVID-19
		1 The Challenge
		2 First Things First: Setting the Frame
			2.1 Duration and Extent
			2.2 Business Model
			2.3 Stakeholder Philosophy
		3 Ensuring Sufficient and Effective Processes
		4 Monitoring and Driving Progress
		5 Communication
		6 Worth Remembering
			6.1 Check Your Biases
			6.2 Encourage Candor
			6.3 Consider a Full Stop
			6.4 Be Encouraging
		Bibliography
Part II: The Board´s Discussions on Topics of Family Enterprises´ Strategies
	The Key Issues of the Family Enterprise´s Strategy
		1 The Key Question
		2 Are We Up to Driving the Strategic Development of a Company Forward?
		3 What Is Our Business Model, Which Are the Profit Sources, and What Do the Financial Implications Look Like?
		4 What Is the Significance of Volume?
		5 What Could Lead to the Ruin of the Business Model?
		6 Which Other Threats Must Be Avoided at All Cost?
		7 What Kind of Financial Structure Does the Company Need?
		8 How Much Must the Company Earn?
		9 How Much of the Profit Can Be Distributed?
		10 How Much and Where Does the Company Need to Seek Growth?
		11 How Is the Dilemma Between Dynamic Development and Stability Solved?
		12 Which Transcending Business Interests Do Shareholders Hold and How Can They Be Taken into Account?
		13 Standards Can Be Developed for Many Strategic Issues
		14 Strategy Work Requires Ongoing Communication
		Further Reading
	Profits as the Basis of Strategy
		1 A Mandatory Agenda Point
		2 A Key Maxime: Profit by Avoiding Losses
		3 Profits Are Results, Find Out the Causes
		4 Profits Through Good Prices
		5 Profits Through Continuous Productivity Improvement
		6 Assessing the Viable Range of Profitability
		7 Assessing the Required Level of Profitability
		8 Deploy Extraordinary Profits
		Bibliography
	Investments Strategy for Stability and Development
		1 The All-Time Relevance
		2 Phase-Specific Strategies
			2.1 Investment Strategy in the Early Phase
			2.2 Investment Strategy During Steady Development
			2.3 Investment Strategy for Continued Growth
			2.4 Investment Strategy During Recession
			2.5 Investment Strategy in Stagnating Industries
		3 Conclusion
	Innovation Strategy for Renewal and Growth
		1 The Relevance
		2 The Steps in Governance of Innovation
			2.1 First Step: Agenda-Setting
			2.2 Second Step: Reviewing the Situation and Monitoring the Development
			2.3 Third Step: Forming an Encouraging Policy Regarding the Innovation Work
			2.4 Fourth Step: Sharing Real-Life Experiences
			2.5 Fifth Step: Pruning the Portfolio
			2.6 Sixth Step: If Nothing Needs to Be Changed, Start an Innovation Project Anyway
		Bibliography
	Patterns of Family Enterprise´s Growth
		1 The Phenomenon
		2 The Rare No-Growth-Requirement
		3 An Upper Growth Limit After the First Generation
		4 A Lower Growth Limit
		5 Four Factors Are Essential for Supporting Sustainable Growth
			5.1 Need
			5.2 Options
			5.3 Capabilities
			5.4 Willingness
		6 From Enterprise to Entrepreneurship: Reintegrating Entrepreneurship
		Bibliography
	Avoiding Unacceptable Risks
		1 The Relevance
		2 The Continuous Deterioration
		3 The Big Mistake
		4 The Accidents
		Bibliography
	Compliance and Environmental Protection: CSR in Family Enterprises
	Recession Management for Coping with Economic Cycles
		Bibliography
	Fighting Financial Squeeze
	The Trade-Offs of Mergers and Acquisitions
		1 The Relevance
		2 Profitability
		3 Financial Affordability
		4 Trade-Offs and Risks
		5 The Summary
		Bibliography
	The Trade-Offs of Going Public of Family Enterprises
		1 The Relevance
		2 Trade-Off Between ``Independence´´ and ``Motives for External Financing´´
		3 The Motives for Going Public
		Bibliography
	Profit Distribution Policy in Family Enterprises
		1 The Relevance
		2 Distributable Return of Financial Investments
		3 Impact Factors on Distribution Policy
		4 Summary: Simple Rules as a Guideline
		Bibliography
Part III: The Development of Professional Owners and Capable Executives in Family Enterprises
	Developing Responsible Owners in Family Business
		1 The Relevance
		2 The Responsibilities and Professionalism of Family Shareholders
			2.1 Educational Milestones
			2.2 Developing Self-Esteem
			2.3 Shared Values and Family Culture
			2.4 Specific Training
		3 Conclusion
		Bibliography
	Development of Executives in Family Enterprises
		1 The Relevance
		2 The Elements of a Comprehensive Succession Plan
			2.1 Planning Scenarios
			2.2 Defining and Anticipating the Need to Fill Key Positions (Pull Principle)
			2.3 Identifying Candidates and Their Development Needs (Push Principle)
			2.4 Developing Future Executives
		3 Summary
		Bibliography
	Challenges and Benefits of Sibling-Consortium in Management of Family Enterprises
		1 The Basic Patterns in Historical Development
		2 The Argument in Favor of a Sibling-Consortium
	Preparation for Succession in Family Enterprises
		1 The Relevance
		2 Mandatory Requirement: Passion for the Business
		3 Crucial Learnings
		4 Learning to Work
		5 Learning to Lead
		6 Learning ``Size´´
		7 Learning to Take Responsibility
		8 Learning ``Foreign Countries´´
		9 Learning the Trade
		10 Learning About the Style and the Stakeholders
		11 Not ``Coming Home Too Early´´
		12 Personality
		13 A Mentor
		14 Conclusion: Clarity About Timing
	The Challenges and Benefits of Non-family Management in Family Enterprises
		1 The Relevance
		2 The Prerequisites
		3 Professionalism
		4 The Benefits of Governance for the Executive and the Owners
	Professional Executive Search for Family Enterprises
		Bibliography
	The Trade-Offs of Incentive Programs in Family Enterprises
		1 The Relevance
		2 The Patterns of Incentive Schemes
		3 The Trade-Offs
		4 Some Maxims
	The Family Is the Destiny of the Enterprise