Families are the better bosses

In the long run family-owned enterprises generate more revenue and are more profitable than companies owned by many individual shareholders. This is a fact confirmed by a competent source: it is the finding of a recent study conducted by the Credit Suisse bank. According to the study, the shares of European companies, which are owned by more than ten percent by their founding families, have outperformed their economic environment since the year 1996. The annual outperformance of these shares amounted to eight percent on average. Similar results were obtained in the USA.

Among other things the authors of the study identified long term management strategies as one important factor for success. Most owning families wish to pass on their shareholding to their descendants and are therefore interested in maintaining the value of their investment. For this reason, according to the study, they do not concentrate on the next quarterly figures, but adjust their planning to wider time horizons. Furthermore, family-owned companies rather focus on their core competences, only engage in a limited number of activities and concentrate on niche markets. Another important aspect according to Credit Suisse is the better coordination between the interests of management and share holders.

In the course of the study the Swiss analysts compared the performances of companies significantly influenced by owning families with those of companies owned by many shareholders. GERMAN