KPMG Enterprise’s latest Global Family Business Report, The regenerative power of family businesses: Transgenerational entrepreneurship, which it conducted with STEP Project Global Consortium, surveyed 2,439 chief executive officers (CEOs) and other leaders from top family businesses across 70 countries and territories, including Canada.
The study showed that, while financial performance is still important, so are non-financial aspects, and internal and external social performance, especially as they impact the family’s reputation and legacy.
“These things hold a lot of weight when these families are making decisions, so they have to be factored in. When we talk about external social, it’s things like ESG, in the sense of: are we actually supporting communities? Are we being a good corporate citizen? Are we being socially responsible without our community and internally?,” said Trimarchi, noting that meant family business owners were also thinking about diversity and inclusion, and the role of their workforce.
“Having those four buckets of performance – financial, non-financial, internal social, and external social – was really powerful to see. If that’s how they’re defining success, then those who are supporting them on that journey really need to understand that and treat that as the definition of success outside of the more traditional definition of purely success is maximum financial return.”
That’s where Trimarchi said advisors need to shift mindset: “let’s look at these clients, not as family businesses, but instead as business families. While it’s a very nuanced thing, we’re swapping the word, a family business is a vehicle of wealth, whereas a business family is a family that may have multiple vehicles of wealth because we’re seeing an increased diversification.”
