Perspectives on global family business
The idea of family-owned businesses has evolved overtime and generally adopted as a legal entity operating in an economic sector, but expected to outlive generations. It has flourished in several climes like Italy, United States, India and Germany. Mostly, it has been a veritable tool in advancing socio-economic development. But it has also failed in many places.
However, family businesses in Nigeria as in the case of Diamond Bank are often not sustainable when the children of the founders take over. Thus, the Nigeria’s business landscape is dotted with businesses which succeeded while the founders were in charge but collapsed after the original owners retired or died. Such businesses were those owned by Moshood Kashimawo Olawale Abiola, popularly known as MKO Abiola. Others included the Ekene Dili Chukwu Transport Company that was founded by the late Chief Augustine Ejikeme Ilodibe, who died on July 1, 2007; the Henry Stephens Group of companies owned by Henry Oloyede Fajemirokun, whose business grew rapidly and diversified into several spheres such as engineering, banking, insurance, shipping and oil, but went under after his death in 1978; the Odutola business empire, which was owned by two brothers- the late Alhaji Jimoh Odutola and the late Timothy Adeola Odutola and the businesses of Sir Joe Nwankwo whose beverage factory used to produce Gina soft drink, but collapsed alongside his other investments soon after his death.
“When I told my children I was going to retire, they told me, ‘Dad it’s a pay back time and that pay back is going to unfold’” Pascal Dozie was quoted as saying by Fortune, an online magazine, on May 14, 2009.
Surely, the promised pay back wouldn’t have been the manhandling of his long years of hard work to raise a bank of international repute like Diamond Bank. His retirement, of course, brought back his business to his family, as his first son, Uzoma Dozie, took up the mantle of leadership in 2014. Unfortunately, the retirement of Uzoma at the bank coincided with the retirement of the whole institution.
First City Monument Bank also followed the same family succession trend, with Ladi leading the charge, after his father, Otunba Subomi Balogun retired and has sustained it till now.
Ibru Organisation: Nigerian businessman, the late Olorogun Michael Ibru, started out in 1957 by importing and selling frozen fish from the back of a truck. From fishing, the company expanded into other business sectors such as brewing, construction, petroleum distribution and bulk storage, bulk liquid products, warehousing and importation. Ibru’s first son, Oskar, took the helm of the organisation in the 1980s and has been responsible for steering the wheel since then.
The Dantata Organisation was founded around 1910 by the patriarch of the Dantata family, Alhassan Dantata, who started trading commodities such as kolanut, cocoa, beads and groundnuts in Lagos and Accra under the company name, Alhassan Dantata & Sons Limited. Today, his grandson, Tajudeen Aminu Dantata, is in charge of the overall family business. Rising through ranks from Group Director in Dantata Organisations Limited to Group Managing Director in 1994, the organisation is now a large conglomerate with interests in oil exploration, manufacturing, banking and finance, import and export, farming as well as merchandising and commodity trading. The group’s yearly revenues are said to be exceeding $300 million.
Phillips 66, worth about $43 billion, from the United States, was founded by Frank and L.E. Phillips in 1917 as the Phillips Petroleum Company. A merger with Conoco in 2002 created ConocoPhillips, but Phillips 66 was spun-off only 10 years later. The Phillips family has remained a large shareholder in the company.
SoftBank, with estimated value at about $72 billion, is owned by Japan’s second richest man, Masayoshi Son, thanks to the global telecommunications company he founded in 1981. SoftBank owns 80% of Sprint and 32% of Alibaba. Son is said to be grooming a successor as he prepares to step down from his role as CEO.
India’s Tata Consultancy Services, worth about $80b, like most other Tata Group subsidiaries, is controlled by promoter and major shareholder Tata Sons. According to Tata Sons’ website, about 66 percent of the holding company’s shares are held by philanthropic trusts controlled by the Tata family. The company traces its roots to 1868, when it was founded by an industrialist, Jamsetji Tata.
Volkswagen, the German auto giant, is worth about $120 billion. Many members of the Piëch-Porsche family together hold a majority stake in Volkswagen through their Porsche Automobile Holding company. The Piëch-Porsches are descendants of Porsche founder Ferdinand Porsche. Today at least five family members sit on the board of Volkswagen. Volkswagen brands include Porsche, Audi and Bentley.
Samsung Electronics, estimated at about $174b, is a South Korean company. Lee Kun-Hee worked hard to grow his father’s company, Samsung Group, into a global conglomerate. He is chairman of the flagship business, Samsung Electronics, while his son, expectedly the successor, Jay Y. Lee, is vice chairman. Daughters Boo-Jin and Seo-Hyun also hold executive roles within the firm.
Oracle, a United States company, is valued at about $192 billion. Larry Ellison was the Chairman and Chief Technology Officer of the software company, making him one of America’s top richest men. While he stepped down as CEO in September of 2014, he groomed his children, Megan and David, who both hold Oracle stock, to take over the family business.
Walmart: Estimated at about $241 billion, the Walton family, in United Staes, owns about half of Walmart through Walton Enterprises, according to Thomson Reuters data. The 50% stake is valuable enough to put five heirs among the wealthiest people in the world. Brothers Rob and Jim Walton sit on the company’s Board of Directors, and along with sister Alice and sister-in-law Christy, each have a net worth hovering around $35 billion. Rob Walton’s son-in-law, Gregory Penner, in recent past, succeeded him as Chairman.
Novartis is a Switzerland-based drug maker, worth about $279 billion. It is one of the world’s biggest drug makers that emerged in 1996 after the merger between Sandoz and Ciba-Geigy. Today, the descendants of Edouard Sandoz, founder of Sandoz in 1886, own a substantial amount of Novartis shares. The Sandoz Family Foundation is the company’s single largest shareholder.