The company's reputation is strongly linked to the family and the lives of its members – Photo: Shutterstock
Business families interested in their longevity build their reputation through respectful relationships with their stakeholders over generations. Some families more intentionally, others simply because it is part of their values. In general, they are attentive to opportunities for good relations and minimization of negative impacts, since, in many cases, the company's reputation is strongly linked to the family and the lives of its members.
“Increasingly, building a good reputation will be related to guidelines established by controlling shareholders to guide stakeholder relationships and ESG practices.”
The way a business family and its company(ies) act(s) impacts the business in attracting talent, consumers, and investors. This is already intuitively perceived and practiced by many family businesses, but, recently, it has proven to be a competitive differentiator. Increasingly, building a good reputation will be related to guidelines established by controlling shareholders to guide stakeholder relationships and ESG practices. Concepts such as Shared Value, Conscious Capitalism and Stakeholder Capitalism, in addition to the impactful rise of the ESG concept, brought different perceptions to the subject.
Evaluating and managing impacts in relation to different audiences is decisive for a positive reading of the market and society. Being perceived today as a family enterprise that generates value for society is no longer just a question of creating jobs, paying taxes and maximizing results for the shareholders. The new challenge for business families is to invest in good relations with their stakeholders, balancing return, risk and impact.
According to the survey “The Future of the Family Business: Turbulence and Transformation in the 2020s”, conducted by the Cambridge Family Enterprise Group, five ingredients are critical to the success and longevity of the family business:
1) be a family purpose driven, with clarity as to what they are trying to accomplish together as an entrepreneurial family, without losing the individuality and complementarity of the profiles that make up the entrepreneurial family.
2) Live up to shared family values and which are the basis for the way family members treat each other and for conducting their undertakings. Having a space to vent emotions openly, respectfully and with confidence is important.
3) see your businesses as generation centers of value in several aspects.
4) Design a dynamic family business, with a living portfolio of shared assets and activities.
5) Manage the family's total wealth, which includes the various value actions undertaken over time and which have brought no results financial, but reputational, relational and social.
I emphasize how the wealth of a business family is built from different assets, and reputation is especially relevant among them. As research points out, shared and purpose-oriented family values are an important foundation for generating value and building reputational assets.
Investing in good practices with different stakeholders means facing challenges and minimizing impacts and risks in the quest to generate value and consistent, long-term results.
Bea Johannpeter She is a member of the Cambridge Family Enterprise Group (CFEG), leader of the Gerdau Johannpeter Family Council, director of the Helda Gerdau Institute, former president of the Group of Institutes, Foundations and Companies (GIFE) and Board member of the Instituto de Cidadania Empresarial (ICE)
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