Family Business Forum / Rene Rossignaud

Environmental, social and governance (ESG) has been a hot topic in the business space over recent years, with more public consciousness on a wide range of issues, including climate change, modern slavery, poverty, and inequality.

Companies are now expected to contribute not only to minimise negative impacts to such challenges, but to also help society progress and replenish the environment. In this respect, good governance within a business is vital.

This is especially the case for family businesses, which may face challenges when it comes to decision-making primarily due to the significant amount of emotion placed into the business.

This was a topic that was highlighted during the Family Business Forum, an event co-hosted by Ganado Advocates and Zampa Debattista on Thursday. The forum brought together various professionals and governance specialists to discuss different perspectives on how important strong governance is when it comes to establishing value for family businesses. One of the panels, moderated by Zampa Debattista Partner Mark Wirth, featured Ganado Advocates Partner Annalise Papa, Alberta Group Director Liz Barbaro Sant, MCESD Chairman David Xuereb, and APS Bank Senior ESG Manager Matthew Swain.

Speaking during the panel discussion, Dr Papa stated that in order for family businesses to improve their governance, they have to first and foremost “know exactly where they are at every point in time and know what they’re doing”.

Annalise Papa / Ganado Advocates
Ganado Advocates Partner Annalise Papa / Ganado Advocates

Businesses, whether family-owned or not, cannot think about governance unless they truly “know what the business stands for”.

In the case of family businesses, businesses leaders need to be able to take a step back when emotions start to kick in and influence decision-making. Business leaders must ensure that the decision “is aligned to the strategy”, Dr Papa explained.

Additionally, it is vital for business leaders to “write everything down”.

She added: “It’s not that many businesses don’t have a strategy, but many just don’t write it down. Writing it down allows you to have your legal basics covered as a company. As the business becomes more complex, how can your report on your ESG if you’re doing something you’re not writing down?”

Ms Barbaro Sant, who has been involved in family business Alberta Group for 33 years, said that a governance structure “creates the roadmap for decisions”.

She acknowledged that family businesses must also express a willingness to remain relevant in their respective industry.

Liz Barbaro Sant / LinkedIn
Alberta Group Director Liz Barbaro Sant / LinkedIn

Family businesses tend to struggle when they are passed on from one generation to the next, particularly due to the older generation’s resistance to let go or pass information on to the younger generation. This is due to the lack of an effective succession plan.

“Founders need to respect the growth of the company,” Ms Barbaro Sant stressed.

In order to do so, they may need to employ people who are greater or more knowledgeable about the area than them. However, she said that it is also important for family business leaders to be careful “not to turn the business into something they didn’t initially plan it to be”.

Dr Papa agreed with this, adding that the sharing of knowledge between Founders to the next generation “helps the business stay relevant”.

“Part of staying relevant is knowing when you need counsel. If it’s too expensive to consult and external lawyer or advisor, then train someone in-house instead,” she concluded.

Featured Image:

From left: Zampa Debattista Partner Mark Wirth, Ganado Advocates Partner Annalise Papa, Alberta Group Director Liz Barbaro Sant, MCESD Chairman David Xuereb, and APS Bank Senior ESG Manager Matthew Swain / Rene Rossignaud

Related

Martin Agius / Convenience / Facebook

The Convenience Shop planning to make international expansion by 2025, says CEO Martin Agius

1 March 2024
by Fabrizio Tabone

He was speaking as the retail chain marks 15 years since it opened its first outlet in Żebbug, back in ...

New AQA SURE FUND seeks to focus on how ‘fish behave in your pond’ for high returns

1 March 2024
by MaltaCEOs

An actively managed strategy will focus attention on market behavior for a high yielding investment product.

How many airports is Malta connected to in 2024?

1 March 2024
by Fabrizio Tabone

MaltaCEOs.mt takes a look at the options available to travellers, as well as key business destinations, in the wake of ...

‘One of the most welcoming sights in any port worldwide’: Valletta Waterfront’s Forni buildings restored

29 February 2024
by MaltaCEOs

Valletta Cruise Port CEO Stephen Xuereb celebrated the recently finalised restoration of the historic Forni Stores.

Close Bitnami banner
Bitnami