A new global ranking of family businesses features 20 Canadian firms. The Global Family Business Index, published by the University of St. Gallen, Switzerland and EY, ranks the world’s 500 largest family-controlled firms by revenue. The list includes both privately held companies and publicly traded ones, but to be included in the ranking the family must control at least 50% of the voting rights for a private firm, or 32% of the voting rights for a public one. (The 32% figure is because only about 60% of corporate voting rights are ever exercised.)
As you can see from the table, many of the 20 Canadian family businesses on the index are controlled by members of the Canadian Business Rich 100 ranking.
(Note that the original index classifies Thomson Reuters as a U.S. company. But since it is 55% controlled by Canada’s richest family, the Thomsons, through their Canadian holding company, Woodbridge, I’ve included the company here.)
Mixing business and family can clearly be a highly lucrative combination—but also a combustible one. It takes tremendous discipline to maintain control over a corporate entity overmultiple generations. It’s rare for families to successfully navigate even one generational transition in the boardroom—a Canadian Business Insights study from last year found that just 17% of family-run businesses have a firm succession plan in place. And lots of family businesses struggle even to get to the stage where a transition might be possible, since working with your family can be even more stressful and filled with conflict than usual (it harms business innovation too).
MORE FAMILY BUSINESS INSIGHTS:
- The 4 Cs of Conflict-Free Family Businesses »
- 3 Tips for Avoiding a Fight Over Family Financing »
- Don’t Let Your Family Destroy Your Business »
- Too Many Family Businesses Have No Succession Plan »
- How to Revitalize the Family Business »