Despite the turmoil caused by the COVID-19 pandemic, family businesses have managed to maintain their resilience. The 500 largest family businesses in the world – including a Greek one – generated revenue of $ 7.28 trillion, employing 24.1 million people in 45 countries. These are some of the findings included in the research of EY and the University of St. Gallen in Switzerland, 2021 Family Business Index, which reveals how the world’s largest family businesses have responded to the recent turmoil in the global economy.
While family businesses, especially in the hospitality and tourism industries, have experienced the effects of the COVID-19 pandemic, many have taken the opportunity to change course. Some shifted their focus to producing critical goods, such as face masks and respirators, while others provided financial support to other companies, reaffirming their commitment to innovation and strong sense of social responsibility.
Despite the turmoil of 2020, Europe remains a favorable environment for family businesses. Germany hosts 16% of the companies surveyed, reflecting the strength of the German economy and the fact that 90% of businesses in Germany are family-owned.
One-third of the family businesses in the sample are based in the Americas, most of which are located in the United States (119 or 24%). Businesses on the American continent contribute $ 2.48 trillion. in revenue, while employing 6.4 million people.
Asia hosts three of the top 20 family businesses, as well as the oldest family business in the sample, the Japanese Takenaka Corporation, with a history of more than 400 years. Fifty-five companies from mainland China, Hong Kong, Taiwan, Japan and South Korea contribute 87% ($ 835 billion) of total revenue to the Asia-Pacific region.
As a growing number of businesses make commitments to diversity and inclusion (D&I), and environment, society and governance (ESG) issues, family businesses continue to focus more and more on these areas. The average age of the members of the Boards of Directors of family businesses is 61 years, while 80% do not have members of the family board under 40 years. Utilizing the experience, knowledge, and technological and digital skills of the next generation can help maintain growth in a fluid consumer landscape.
As Boards continue to seek to diversify their composition, the share of businesses with female family members on Boards has improved, reaching 31% in 2021. At the same time, only 5% (27) of family businesses of the sample have female CEOs, a percentage comparable to 8% (41) of companies in the Fortune Global 500 ranking.
By looking at ESG issues in more detail, family businesses are working to achieve new goals in this area. At least 53% of surveyed family businesses submit corporate reports based on official ESG indexes. Half of them (51%) come from Europe, the Middle East, India and Africa, followed by businesses in the Americas (30%) and the Asia-Pacific region (19%). ESG reports represent an opportunity for businesses to communicate the positive impact they already have, while potentially helping to attract new talent and customers, as well as increase revenue.
Commenting on the research, Ms. Eftychia Kaselaki, Partner and Head of Private Sector of EV Greece, said: “The pandemic confirmed what we all knew about family businesses – that they have great resilience, as they focus on long-term horizons. many of them seized the opportunity and turned to new activities, promoting innovation.The great challenge for the next day is to be able to meet the growing expectations for a greater emphasis on action in the field of “on ESG issues of diversity and integration, expanding their Boards and giving increased responsibilities to the representatives of the younger generations”.
Source From: Capital