Current affairs

Friday, 15 de December, 2017

After the introductions by Amadeu Jori, the Chairman of the ASCEF, and Fernando Serrate, a partner at KPMG in Catalonia, María Jesús Rico, a Governance, Risk and Compliance partner at KPMG Advisor gave a presentation that covered important aspects in relation to family companies such as the need for good practices, effective corporate governance and adapting these practices to family companies.

In a family company, there are some key issues that shape this corporate governance: “the family culture, the number of shareholders, the friendly atmosphere between the partners, etc. As such, it is necessary to analyse the strengths and weaknesses of the company and the family members who work there. Moreover, shareholders and managers have to work in a single chain and contribute to the organization”, explained the KPMG partner.

In María Jesús Rico’s opinion, it is useful to bear in mind that, in a family company, there are three clear lines of defence: Operations, the internal auditor (who is usually independent) and the Board of Directors. “The CEO is also involved in the operations too, but they also form part of the Board of Directors”. Family companies tend to have their own particular features, with differences from listed companies. “They are driven by the company and family reputation. They tend to be more fun and it is important to know about its history (the company’s and the family’s), people, idiosyncrasies and objectives, as well as whether they all have the same interests and, most importantly, who is who within the organization”, added the professional.

Family companies have evolved over time. To establish a set of good practices, according to María Jesús Rico, there has to be a Family Board, an external CEO from outside the family and independent board members. “In addition, sponsorship of the Board of Directors is required, as well as a clear and efficient model of internal control”.

Cobega Case Study

To share an insight into the everyday running and management model of a family company, the conference welcomed Alejandro Climent, the general director of Grupo Cobega, the fourth generation of this successful group that was established in 1900 by Santiago Daurella. Since it was founded, the company has undergone many changes, “from international expansion to diversification, as well as the acquisition and merger of subsidiaries. This is the hallmark of an entrepreneurial family that is now one of the leading economic goods and asset management companies”, explained Alejandro Climent.

The director emphasized that the company has its own particular governance model that offers a series of benefits, including greater independence in terms of the role of the internal auditor reporting to the Board of Directors, the creation of an internal control culture, an enhanced capacity to attract talent, and an internal auditing plan that includes the risks and issues that most concern the Board. However, one drawback is the fact that the model is not 100% aligned with general frameworks. Climent underlined the importance of having a clear understanding of what the family wants and whether they are ready for change. “We are in a constant state of mergers and changes and we have to be able to adapt to them, give the changes the time they need and choose the right moment to audit”.

4th Family Company Barometer

At the same conference, the results of the 4th Family Company Barometer were presented by Manel Blanco, the partner responsible for family companies at KPMG Digital in Catalonia. One of the first conclusions of the research was that 80% of family companies are optimistic with respect to the evolution of their business over the next 12 months.

Their confidence in the future is once again underpinned by the good results recorded this year in terms of turnover, employment and internationalization. Moreover, a greater proportion of family companies have increased (70%) or maintained their turnover, while only 8% have recorded a reduction. In terms of employment, 94% of family companies have increased or maintained their workforce, while 76% state that they now operate in foreign markets.

In terms of setting priorities, once again this year, family companies continue to prioritize improving profitability (70%), increasing turnover (52%) and innovation (34%). Other aspects such as talent acquisition (28%) and getting ahead in terms of breaking into new markets (26%) were some of the priorities that have most increased in importance for Spanish family businesspeople.

Despite the generalized optimism, family companies also face a series of challenges, the most important of which are competitiveness, the need for qualified professionals, decreasing profitability and political uncertainty, although the survey was conducted before September this year.