Author: Borja Igual

The education of family business stockholders is essential for the good performance of the family business, and it is fundamental that current and future owners have the necessary knowledge.  Under this premise, the Catalonian Family Business Association (ASCEF) successfully organized a new edition of the family business stockholding partner education program, led by experts from the law office Cuatrecasas.

The session was conceived with the purpose of providing tools of knowledge that could help develop their stockholder role with responsibility, since in order to reach the levels of excellence and good governance in the family business it is necessary that partners carry out their roles with knowledge and rigor.  The quality of decision making will depend on the knowledge and information provided to company members. Eventually, investment of resources on the education of stockholding partners helps gain the family business members’ interest and involvement in the company.

This is why it is fundamental to convey to successive generations the importance of protecting the family and business legacy and that this interest in education be transmitted to next generations as an element inherent to the responsibility of every family business partner, whether involved or not in management.

This session was divided into three differentiated parts: stockholding partners rights and duties, legacy protection in personal situations and company specific tax specifications, as well as individual partner taxation.

Last Tuesday, June 22^nd, the Catalonian Association of Family Business (ASCEF), held its General Assembly virtually attended by a wide representation of its associates.  At this event, the 2020 accounts and the 2021 budget were approved, and a record of completed activities was presented.

ASCEF President, Amadeu Jori, spoke to the organization members about the pandemic which, he said, “caused a deep, sudden and unexpected health, economic and social crisis that impacted us all with more or less severity“. For Jori, many companies have been examples of a capacity for renewal, innovation, and transformation in their quest for competitiveness, a defining trait of the family business. In the face of the economic crisis, ASCEF President highlighted the importance of private-public collaboration and the need to convey these messages to public administrations.

The Assembly ended with a lecture by Pablo Foncillas, business innovation educator and researcher, who spoke about consuming trends and digital transformation.

Professor Pablo Foncillas, educator, independent counselor, and business innovation researcher was invited to participate in the XXIII Associate General Assembly of the Catalonian Family Business Association (ASCEF), virtually held last Tuesday, June 22^nd. The Professor took part with a lecture about digital transformation entitled Consuming Trends: 66 days for world resetting.

In relation to the title and the reference to 66 days, Foncillas explained that “it is the total number of days that takes us to get used to a new habit“, according to new research elaborating on previous studies done in the 70s, which had set a habit acquiring period at 21 days, “without specifying that such processe starts after 21 days.”

“Regarding the concept of digital transformation, made up by two concepts, company owners, executives, mid-ranking managers and workers get obsessed with the word ‘digital’, while the future of our businesses lies in the word ‘transformation’,” he stated.

Professor Foncillas underscored the importance of “unifying the online and offline worlds, a path that enhances the life of professionals“. In this way, the speaker noted that last year had served as an accelerator for this digital transformation, illustrating that “e-commerce has grown during the first lockdown weeks as much as in the previous ten years.”

Throughout his lecture, Pable Foncillas covered topics related to digital transformation, such as the end of property as we know it, and how transformation affects the retail sector or ESG (environmental, social, governance) criteria.

Given that we have less than ten years to reach the Sustainable Development Goals (SDG) established in the United Nations 2030 Agenda, this organization appeal to all sectors of society to spring into action to end poverty, protect the planet and improve people’s lives and aspirations in this world.

ASCEF is an organization committed to sustainable development policies understood as the way to satisfy todays’ needs without compromising the capabilities of future generations. To that end, it promotes different education and information events seeking to raise awareness in all its associates given the need to harmonize three basic elements: economic growth, social inclusion, and environmental protection. In this way, the Association has joined the 2030 Agenda Commission of Forment del Treball, whose purpose is to promote this world action program.

At an educational level, during this quarter, ASCEF associates took part in a meeting about transformation and sustainability scheduled within the conference series “The Family Business Shares”, organized by Territorial Associations of Family Business, and attended a conference by the CSR specialist Silvia Urarte, to discuss the alignment of the referred SDG with companies’ operations.

• “We reinforce our values through protocols in order to ensure success in business successions and continuity”
• The Ophthalmology Institute Fernández-Vega takes part in the second session of “The Family Business Shares” conference series

The conference series “The Family Business Shares“, organized by Family Business Territorial Associations including the Catalonian Family Business Association (ASCEF), has held a new online session attended by the prestigious  ophthalmologists of the Fernández-Vega family, Professor Luis Fernández-Vega and his son, Doctor Luis Fernández-Vega Cueto-Felguerosoen; a webinar that was moderated by the journalist Ana Samboal.

The main goal of “The Family Business Shares” series  is to share and learn about new trends in family business management, hand in hand with family business leaders at domestic and international levels, as it is the case of the Instituto Oftalmológico Fernández-Vega, main participant in this edition. With a trajectory of 135 years through five generations of specialists, the Fernández-Vega family maintains its legacy handing down through generations what they call CICACOA, Spanish acronym for science, love, comprehension, and spirit.

The company as a necessity
Being an entrepreneur was not in Fernández-Vega’s plans, but the high demand from patients forced them to expand and gradually increase their employee volume becoming more professionalized. As Luis Fernández-Vega Cueto-Felgueroso points out: “the medical calling always prevails. That is clear to us. However, it is true that at home we felt that we needed to be prepared for what was coming upon us, there was a business task behind“. Since its origins in 1886, they made a clear bet on international education, something that contributes to the business itself thanks to the knowledge base it provides.

The Instituto Oftalmológico Institute Fernández-Vega was recently recognized by MRS, leading healthcare ranking in Spain, as the country’s best private ophthalmology center, where almost every month tempting offers are heard and never examined, since there is something more valuable for this family: “We have our own values, and that is very difficult to measure. Being part of a different group may make us lose our identity, the reason of being of our institution. That is what has led us where we are“. 

Succession protocols
Protocols play a fundamental role in the family business operation governing aspects like incorporation of new company members, shareholder structuring and succession plans. “In order to be a shareholder, you need to work at the company and meet certain requirements. So, we currently have three shareholders, even though there are more family members at the company, and that helps us make decisions“, affirms Professor Luis Fernández-Vega.

They also have a family protocol dictating how to train a family ophthalmologist willing to participate in the business, how many years he should work abroad or how management should be professionalized. The limit age to perform surgery has been set at 75 years old, as senior Luis indicates: “one must leave places amid applause not boos. You cannot deny reality and you must know when to quit, and if conditions are not optimum, you cannot be a burden for the organization“.

The Family Business Shares
In joint collaboration and providing value to more than 1,200 associated family enterprises, all the network of Family Business Territorial Associations takes part in the conference series “The Family Business Shares” sponsored by Credit Suisse, an entity committed to the needs and realities of family enterprises.

The Family Business Territorial Associations constitute a non-profit network born to support and advocate for family enterprises in Spain, which seeks to contribute to their development and strengthening. Standing out among its main goals is to be an institutional, business, and social reference for the family business reality in each autonomous region. These associations are linked to the Family Business Institute (IEF), the Family Business Network (FBN) and the European Family Business (EFB).

They encompass over 1,100 family companies related to production operations that share family business values such as stability and tenacity (long term vision), commitment (to new generations, employment, and sustainability) as well as entrepreneurial and hard work culture.

The Catalonian Family Business Association (ASCEF) organized a conference, in collaboration with KPMG, entitled “Managing Resilience in the Family Business“, aimed at covering this family business trait when addressing not only global pandemics, but any kind of risk.

In his welcoming speech, ASCEF President, Amadeu Jori, pointed out that all companies acted “swiftly to protect themselves in the face of the great and sudden drop of activity caused by the pandemic.”. “Family businesses, making agile decisions, have shown their deeply resilient and resistant instinct embedded in its DNA which results from their commitment to sustain the entrepreneurial spirit over different generations“, Jori indicated.

Meanwhile, Manel Blanco, responsible associate for KPMG Family Business in Catalonia, added that “these family businesses also demonstrated a great ability for adaptation in the face of the crisis we have gone through“.

María Jesús Rico, KMPG Governance, Risk Management and Compliance associate, dug into the family business resilience and the key elements for its management, before, during and after the occurrence of a critical event. “Dealing with uncertainty demands immediate answers and rethinking mid to long term strategies and risks“, explained Rico, who underscored that “managing emergent risks with an impact on the business continuity remains a pending issue“.

In this way, in order to prepare for a potential critical event, Rico considers that it is important to start by analyzing our enterprise, working with a map of risks completed with a map of impacts, thus working on contingency approaches for situations of low likelihood, which, nonetheless, might have a great impact, as it is the case of the pandemics. This analysis, along with a work plan and its monitorization, should be already prepared when the unexpected event comes: “This will allow to make decisions in a swift manner with an eye on the future“, Mª Jesús Rico indicated.

The final part of the conference was also attended by Jordi Barri, CEO of Teresa Carles Healthy Foods, who shared her experiences and resilience strategy to address the uncertainty caused by the health crisis in the catering industry. Finally, the Director of the Family Business Department of Universitat de Girona, Pilar Marquès, took part to raise various questions aiming at digging into the company’s case.

• This is an optional resource that is typically considered for succession decisions or in situations of conflict.
• The guide, which includes examples and a regulation model, will be free for all entrepreneur families.

The Catalonian Family Business Association (ASCEF) has developed an instrumental guide for the Family Council seeking to encourage family enterprises to implement this corporate governance instrument which is currently present in only 3 out of 10 family businesses. The Family Council is an optional body for self-management and debate whose main functions include making strategic decisions for the company, acting as connecting element between the family, the board of directors and the company’s management, and also preparing family successions and preventing family conflicts. It should also further the family members’ implication and create emotional ties with the business.

The Family Council Guide, which ASCEF will make available, at no cost, for all family entrepreneurs through its website ascef.com, is a theoretic document that also includes practical cases and a guiding regulation model. This handbook has been prepared by the Family Business departments of the universities Abat Oliba CEU, Universitat de Barcelona, Universitat de Girona, Universitat Internacional de Catalunya and Universitat de Lleida in collaboration with Cuatrecasas law firm.

“As an organization comprised of over 100 companies representative of the Catalonian business fabric, we have considered it necessary to lead an awareness and promotion project on the advantages of counting on a Family Council to develop constructive and long-lasting dynamics in order to contribute to the business project“,  said ASCEF President, Amadeu Jori.

For Jori, “one of the current challenges of family businesses is that they only consider the use of a Family Council when giving way to second or successive generations or when they found themselves in tension-causing situations. This is not an efficient way to act since it inhibits the development of an environment of trust in which to make strategic decisions with transparency and consensus“.

According to data by the Association (*), 39% of family businesses in Catalonia are in the hands of their respective founding entrepreneurs, in 48% of cases, the second generation has a prevailing presence, both regarding ownership and family business management, while third generations are only present in 8% of the companies.  With regard to succession processes, 48% of family businesses acknowledge not having agreed on the way successions would take place.

It is important for ASCEF that entrepreneur families change their non-binding informal communication spaces for Family Council bodies, and that they also regulate their operation, structure and role by clearly outlining its responsibilities, composition, agreement reaching systems and ways of steering them towards business governance bodies.

According to experts, the Family Council should pay special attention to communication, information and the education of its members. The challenge is to maintain a fluent and ongoing communication level, so that points of union among family, ownership and business stay solid, and that the family enterprise strengthens its business following the best standards of good governance and competitiveness.

Family businesses in Catalonia stand for 88% of the total number of enterprises, 76% of private employment and 68% of the economy’s added value. For 74% of family businesses, their family nature constitutes both a positive aspect and a competitive differentiating asset.

* Data from the survey “The Family Business in Catalonia” carried out by ASCEF in 2017 on a sample of more than 200 companies associated and not with the organization.

The Catalonian Association of Family Business (ASCEF) has adhered to the manifesto advocating for the expansion of Josep Tarradellas Barcelona-El Prat Airport; together with over 200 organizations representing the economic sphere and the manufacturing network of Barcelona City and Catalonia in general.

Under the clamor “Yes to the airport’s expansion agreement“, we demand a major institutional accord among the public administrations (Aena, Generalitat de Catalunya, Área Metropolitana de Barcelona and city councils of Barcelona and Baix Llobregat) that involves the European Union authorities in order to approve the Barcelona Airport’s expansion.

The expected expansion consists of a new satellite terminal and a 500-meter expansion of one of the parallel ramps, with an estimated investment of €1.7 billion that would create 83,000 direct jobs and a total of 350,000 new employments, besides spurring the Catalonian GDP in more than two points, 8.9% up from 6.8%.

This expansion will not only allow the region to become a sustainable touristic destination but will also invigorate the economic activity by creating jobs, attracting and retaining talent and international investment.

On Wednesday July 2^nd, the manifesto was read during a joint event at ESADE, attended by ASCEF President, Amadeu Jori, on behalf of the Association. Among the Catalonian organizations subscribing the manifesto are Foment del Treball, PIMEC, Cambra de Comerç de Barcelona, Cercle d’Economia, Círculo Ecuestre, Barcelona Tech City, ESADE, RACC and UFEC.

The manifesto is available through the following ASCEF web link.

• The financial institution will sponsor a new edition of this initiative bringing together family businesses from all over Spain to share their experiences and strategies

The network of Family Business Regional Associations made up of 18 organizations, including the Catalonian Family Business Association (ASCEF) has subscribed an agreement with Credit Suisse by which this financial institution commits to sponsor the organization of a new series of conferences entitled “The Family Business Shares“.

In this way, an initiative born a year ago just after the Covid-19 pandemic was declared will be extended through 2021. This initiative has allowed family business entrepreneurs from all over Spain and a wide variety of industries, to share experiences and strategies to address this situation.

The new edition of “The Family Business Shares” consists of four sessions to be held online between May and November this year.

The associations involved in this project cover all Spanish autonomous communities and include 1,200 companies from all industries representing 10% of the GDP.

Their mission is to advocate for the Spanish family business as driving force for the productive economy and job creation in the region, as well as to further entrepreneurial culture and promote the continuity of this kind of enterprise.

The agreement’s subscription took place today online between Matilde de la Peña Elías and Mr Rafael de Villar Álvarez as proxies for Credit Suisse, and David González Pescador, Director of the Cantabrian Family Business Association (ACEFAM) and representative of the Family Business Association Network during this series.

The Catalonian Family Business Association (ASCEF) organized a conference in collaboration with Deloitte, entitled “Family Legacy vs. Legacy and Business Project“, which offered a more academic vision of the business family, as well as a view of the current situation of the country’s Family Office and its role in the management of companies.

Carles Garcia, professor IESE Business School, dissected the family business and its corporate governance from an academic point of view, pointing out that “if we seek to improve the company’s management and make it efficient, the bigger the companies, the more necessary it is to relied on a greater number of external members than family members“. He, nevertheless, wished to underscore that the family council is to be taken into account.

In this way, professor Garcia asserted that “a greater number of independent consultants contributes to a greater satisfaction of the council performance“. “It is the family who should bring in the company’s values and mission,” he pointed out, after suggesting that “from the third generation on, it is essential to teach these values to the new generations, so they endure over time“.

Throughout the conference professor Carles García reminded the three basic points to be considered by the business family: unity, commitment to business and development: “Without unity, we are only stakeholders, with more than that, we are a family. We cannot appreciate what we don’t know, when it is known, it is appreciated and it feels represented“. “Having valuable and responsible stakeholders is what we are more interested in, they should have a professional attitude at they do“, he commented in relation to the business family presence in the company.

Fernando Vázquez, Law Associate and Head of the Deloitte‘s Family Business Program, delivered the main conclusions about the FOMM Deloitte survey taken by administrators and coordinators of Family Offices in Spain. About these, he noted that most of them are located in Catalonia, where two generation coexists, most of them managing up to €150 million.

“Despite the apparent rise of the Asian market, 90% of investment by the Family Office in Spain is made geographically in North America and Europe“, Vázquez illustrated, who also explained that these investments rally on real estate (44%) and financial assets (32%).

Lastly, Ignasi Botet, consultant for CABOEL, member of ASCEF, explained his professional experience in the family business realm, particularly in their transition to Family Office. Regarding Family Offices’ management and organization, Botet reminded that “although there is not one method that stands out above the rest, all of them take Family Office as a risk diversification strategy, for it is, in fact, a matter of managing the family legacy long term“.

All the information about the lecture is available through the link provided on the web site’s private.