An Overview of the Environment for Family Businesses in …€¦ · for Family Businesses in...

An Overview of the Environment

for Family Businesses

in PORTUGAL

National Report

Project number: 2016-3-EL02-KA205-002673

This project has been funded with support from the European Commission.

This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.

FABUSS – An Overview of the Environment for Family Businesses in Portugal.

Universidade Aberta – June 2017

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Preface The FABUSS partnership appreciates the usefulness of acquiring and presenting a comprehensive understanding of the environment for Family Businesses in each partner country. There is therefore a need for checking, updating and enriching information presented and analysed in various other sources and for a customised screening of each partner country’s institutional environment’s particularities and weaknesses, as these affect family businesses (FB). The Report in hand, presents the situation prevailing in Portugal, a country where FB represent between 70% and 80% of all firms operating in Portugal (PWC, 2014), and a great percentage of employments and GDP.

This report, has been prepared by the FABUSS Portuguese team whose members are,

Professor José António Porfírio, Professor Tiago Carrilho and Bernardo Figueiredo.

Lisbon, June 2017



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Executive Summary

In the present report, we intend to provide a brief, but not exhaustive, overview about the main topics that frame FB in Portugal, with a special emphasis on the succession issues that usually raise crucial problems affecting the continuity, survival and development of these businesses. Given the relative lack of information about FB, results of the present report are mainly derived from the following sources:

Previous work developed by the authors, as professors and researchers at Universidade Aberta (a Public Higher Education Institution offering eLearning graduate courses in Portugal, and Portuguese partner of FABUSS), in the fields of Strategy and Entrepreneurship;

Primary sources of information like PORDATA and INE, the National Statistics Institute;

Information obtained and discussions held with the Portuguese Association of Family Business (APEF), the IAPMEI – Institute for the Support of SMEs in Portugal, and the AEP – Entrepreneurs’ Confederation of Portugal;

Other information provided by different studies and reports (mainly qualitative) about Family Business in Portugal.

The authors wish to thank all the referred institutions for the given support. All opinions here stated are of the sole responsibility of the authors and the referred institutions, as well as other partners of the project, and its coordinator. None of the referred intervenients can be held responsible for any eventual omissions or errors of data presented, or even missing information, on this report.



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Sumário Executivo

No presente relatório, pretendemos fornecer uma visão geral, mas não exaustiva, sobre os

principais tópicos que enquadram as empresas familiares (EF) em Portugal, com ênfase

especial nas questões relacionadas com a sucessão, que geralmente levantam graves

problemas que afetam a continuidade, sobrevivência e desenvolvimento dessas empresas.

Dada a relativa falta de informação sobre EF, os resultados do presente relatório resultam

principalmente das seguintes fontes:

Trabalho anterior desenvolvido pelos autores, como professores e investigadores da

Universidade Aberta (Instituição Pública de Ensino Superior que oferece cursos

superiores em eLearning em Portugal e parceiro português do FABUSS), nos campos

de Estratégia e Empreendedorismo;

Fontes primárias de informação, como o PORDATA e o Instituto Nacional de

Estatística - INE;

Informações obtidas através de reuniões realizadas com a Associação Portuguesa de

Empresas Familiares (APEF), o IAPMEI - Instituto de Apoio às Pequenas e Médias

Empresas em Portugal e a AEP - Confederação Empresarial de Portugal;

Outras informações fornecidas por diferentes estudos e relatórios (principalmente

qualitativos) sobre negócios familiares em Portugal.

Os autores desejam agradecer a todas as instituições referidas pelo apoio dado.

Todas as opiniões aqui expostas são de exclusiva responsabilidade dos autores e das referidas

instituições, bem como dos restantes parceiros do projeto e seu coordenador. Nenhum dos

participantes no projeto em questão poderão ser responsabilizados por eventuais omissões

ou erros de dados apresentados, ou mesmo informações em falta neste relatório.



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Table of Contents

1. Social and Economic significance of Family Business in Portugal ............................................ 6

2. Policies for Succession and Transfer of Family Business ......................................................... 8

3. Problems identified in Succession and Transfer of Family Business...................................... 10

4. Organisations providing support to Family Businesses ......................................................... 12

5. Identified Good Practices of Family Business Successful Succession .................................... 14

6. Concluding remarks ............................................................................................................... 16

Annex A: Bibliographical references .............................................................................................. 17

Annex B: Sources of information ................................................................................................... 17

Annex C: Organisations supporting Family Businesses .................................................................. 17

Annex D: Some statistics and basic information on Family Business ............................................ 18

1. Importância económico-social das Empresas Familiares em Portugal .................................... 6

2. Políticas de Sucessão e Transferência de Empresas Familiares ............................................... 8

3. Problemas identificados na Sucessão e Transferência de Empresas Familiares ................... 10

4. Organizações que apoiam Empresas Familiares .................................................................... 12

5. Identificação de Boas Práticas de Sucessão nas Empresas Familiares .................................. 14

6. Conclusões ............................................................................................................................. 16

Anexo A: Referências Bibliográficas ............................................................................................... 17

Anexo B: Fontes de Informação ..................................................................................................... 17

Anexo C: Organizações que apoiam Empresas Familiares ............................................................. 17

Anexo D: Alguns dados Estatísticos e informações básicas sobre Empresas Familiares ............... 18



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1. Social and Economic significance of Family Business in Portugal

In any society Family Businesses (FB) play an important social and economic role. Portuguese FB are no exception to this. According to available data, in Portugal 80% of all businesses are of family initiative and owned by families. FB are also responsible for 66% of the Portuguese GDP and 50% of national employment (AEP, 2012b; AEF, 2014). However, around 50% of FB do not reach second generation while 20% do not reach third generation (PORDATA, 2017). Mostly FB are SME’s and, giving its representativeness, problems affecting them have a significant impact in employment and GDP’s numbers. Nowadays, when talking about FB, people often link it to small, residual, not very well managed, old fashioned companies, operating in niche markets, although this most of the times doesn’t correspond to the reality. However, from an historical point of view, FB in Portugal were considered crucial some decades ago, explaining most of the socio-economic development of the country. Far from being exhaustive, we can say the the largest Portuguese groups operating in banking and insurance (like the Espírito Santo/Tranquilidade from the Espírito Santo’s family, or the Pinto & Sotto Mayor/Fidelidade, belonging to the Champalimaud’s family), or even industrial conglomerates (like the CUF - Mello’s from the Mello’s family) were owned by the richest families living in Portugal. After the 1974 revolution in Portugal, all these groups were nationalised and these families, in most cases, emigrated when their FB started to be connotated negatively by the socio-political powers, by linking them to capitalist ideals, as opposed to the general left-wing trend that was growing up in the country those days. Situation started to change a little after mid 80s of the 20th century, with the growing re-privatisation of these former nationalised groups and the return to Portugal of many of the former families. At the same time, the new trend was assisted by the advent of new groups, like those of SONAE, owned by the Azevedo’s family which included businesses from retail to industry, as well as telecommunications, and services; the Teixeira Duarte Construction conglomerate, owned by family Teixeira Duarte; the Jerónimo Martins distribution empire, owned by Soares dos Santos’ family; or even the Cork and Oil companies of the Amorim’s family; the Luís Simões transportation business; or the Salvador Caetano’s automotive companies; to name just a few. Although one can talk nowadays about a more balanced and not so negative view of family firms, unquestionably there are important challenges ahead to the development of these firms in Portugal. Problems faced, however, are not very different from those experienced in other European countries. Most of the information about FB in Portugal is derived from qualitative studies, and there are no expressive quantitative statistics about FB. However, it is possible, without mistake

Key Points:

Importance of Family Businesses in National Economy

The biggest Family Businesses – a few examples.

Portuguese Family Businesses, past and present.



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to say that: - Family firms are present in almost all industries operating in Portugal; - They vary from micro to large businesses, incorporating almost all types of legal

form and are, naturally, privately owned; - Most of the SMEs operating in Portugal are family businesses by nature, although

there is a new generation of companies (usually start-ups) that diverge from this pattern despite usually they are created using as financing the entrepreneurs’ families’ money;

- FB face similar problems posed to other businesses. However, due to their specificity, they probably have higher governance problems than others, which affect the overall performance and even capacity of success in the long term.

According to a study developed in 2011, in which 100 family business owners (Associates of AEP, the Entrepreneurs’ Confederation of Portugal) were interviewed, one of the challenges common to all family businesses in Portugal is that of succession (AEP 2012c; 2012d). This happens mostly because there is the tendency to mix two distinct realities, Company and Family. And this usually opens a conflict between the family context, more centered on equality, involvement, and integration of all its members, and the company’s interests, that should be led by merit, selection and pragmatic analysis. So, besides the usual management problems facing SMEs in Portugal (like management capabilities, financing issues, lack of capital etc.), FB succession can be considered one of the most important factors hindering the healthy continuation, and even resilience of FB in Portugal.



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2. Policies for Succession and Transfer of Family Business

As stated previously, and besides some apparent difficulties in defining what a family business is, one can talk about an overall stable situation in this field today, compared to the one observed just a couple of decades ago in Portugal. Although, nowadays in Portugal, people use the European definition of family business, for many years the definition adopted for FB in Portugal, was mainly that proposed by APEF (the Portuguese Family Business Association), that was basically the one derived from the Finnish definition of FB, adopted by many countries. APEF supported that, besides the willingness to be considered a FB, a firm should be considered as so when it observed the intergenerational conditions, and the following conditions were also possible to verify:

- The power to decide, derived from most of the votes (directly or indirectly) in the board, was controlled by the persons who established the company, or those who have acquired it, or even their direct heirs, naturally family relatives;

- At one point in the life of the company at least two representatives of the family have been involved in the management or administration of the firm, either simultaneously or in succession;

- In the case of companies listed in stock markets, whenever the person who established or acquired the firm or the respective family, possess at least 25 per cent of its share capital.

Today, most countries, including Portugal, have adapted and adopted the definition of FB as follows: “Family Firms are those in which multiple members of the same family are involved as major owners or managers, either contemporaneously or over time” (Miller, Le-Breton Miller, Lester & Canella, 2007) Possibly this lack of a clear and objective definition (giving somehow the ambiguity of the previous definition) of what can be considered a FB hindered the capacity both to evaluate the importance of family businesses in Portugal and, at the same time, given its real importance, to develop concrete policies to support their development and face possible problems during their lifetime. It is known that FB account for a huge number of firms operating in Portugal, with a crucial impact on jobs and GDP. Although succession is a crucial aspect affecting these companies, there is no structured action nor policies designated to face the challenges posed by succession and transfer of family businesses in Portugal. Instead there are what we can call several isolated measures, basically related with fiscal policies, financing, and the development of training for their human resources. In 2004 succession and donation tax and profit delivery tax were abolished and stamp tax over the book value of free of charge transmissions between persons (in this case between successors and succeeded) was reduced to 10%. This tax can even be avoided, in case of transfers between ascendants and descendants.

Key Points:

Definition of Family Businesses adopted in Portugal

Succession process support policies to mitigate problems



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In 2016 the Economy Operational Program financed the ‘Generation to Generation’ Project promoted by the Portuguese Family Business Association. This project supported the conception and implementation of family protocols in 7 family SME. As a consequence, the Portuguese Family Business Association developed a partnership with IAPMEI (the Portuguese institute for the support of SME) and 25 firm associations to deal with succession problems. In 2017 IAPMEI created a financing program to support family members in conflict when one of the members needs financing support to buy the other member’ share. Besides these concrete measures, one can talk about a general friendly climate and general openness of Portuguese institutions to support programs and approve initiatives related with these topics. Isolated (not structured) initiatives concerning training programs related with the development of competencies for family business’s entrepreneurs can also be observed, although concrete results are difficult to measure. Finally, statistical problems don’t allow the precise monitoring of the effects of such measures neither of their impacts on other FB. It seems that there are clear governance issues related with the FB succession challenges but, the peculiarities of each FB probably suggests that, besides and in addition to an overall general basis for the development of competencies in these fields, subsequently, more focused or even individual coaching programs, instead of general proposals, must be considered in order to comprehensively face the challenges ahead in terms of FB succession.



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3. Problems identified in Succession and Transfer of Family Business

The succession design process aims to alert new generations to the need to continue their FB. However, as described before, sometimes both realities (family and business) are not clearly distinguished and appreciated and this usually creates several problems that put in question the future of the firms since it frequently leads to the company’s shut down or alienation to some external third party. When succession is not duly prepared, these scenarios usually come at a heavy familiar cost because family relations tend to deteriorate (AEP, 2012b). To support the present report, and duly examine these issues, the Portuguese team discussed with several 1st and 2nd generation family business owners that inclusively participated in the survey taking place. It was possible to confirm that problems regarding succession were frequent also in our sample and the most relevant and frequent issues outlined by the family owners interviewed are backed up with data from the 2011 family business study referred in section 1 (AEP 2012c ; 2012d) . According to the quantitative and qualitative results of available researches, the main succession problems are as follows:

a. Leading generation feels there are no family successors competent enough to continue managing the company. Concerns relate mainly to who will take leadership: family management or outside management. Usually the leading generation feels there are no family members up to the challenge and decide to sell the business or hand it over to outside management. This usually ends up in family disaggregation and deterioration of family relations.

b. In a previous national study 42% of the respondents confessed to not having chosen their successor nor thinking about that.

c. 58% of the respondents assumed not having any kind of contingency plans for their succession.

d. 65% of the companies assumed not having a defined business plan for their succession.

e. 57% of the respondents did not have any specific agreement defining the rights and duties of any of the involved parts in the succession process.

f. In 48% of the companies inquired the capital was not distributed according to the responsibility that each family member assumes in the company. This is pointed out as a major constraint in a succession process.

g. 63% of the respondents did not consider important to have any type of family pact, family protocol or family agreement defining succession rules or criteria.

h. 50% of the inquired did not have any good practices’ manual that defines the relationships between members of the firm

i. Another problem identified is to deal with family members who are in any way

Key Points:

The importance of succession preparation in Family Businesses

Some problems that occur in a succession process



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connected to the company. Managing intra family conflict is one of the biggest challenges a family business successor must overcome.

j. In line with the situation reported in EU, in Portugal most of the family businesses involved in succession processes are in a state of bankruptcy.

k. In many situations, the successor’s vision for the company has little or no knowledge of the Family Business and most of the times he/she doesn’t even relate to the business.



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4. Organisations providing support to Family Businesses

The sole nonprofit organization exclusively dedicated to family businesses in Portugal is AEF - Associação de Empresas Familiares (Portuguese Family Business Association). AEF represents family businesses operating in all Portuguese industries. All its members are family business owners, and/or members of the board, in case of companies that have opened their capital. AEF’s main goal is to help the family businesses’ network, and assist them in their processes of change. For that matter AEF promotes events of different nature and develop partnerships with some of the biggest consultancy companies in studying family businesses and analyzing public policies. Also, AEF promotes awareness activities with public authorities to increase their knowledge of the specific problems affecting FB in Portugal, and to promote the development of specific programs to support their development and to overcome present difficulties to their progress and growth. Besides AEF, there are several private companies specialized in family businesses. Without being exhaustive, we highlight the following ones:

Ef Consulting – Is a company specialized in entrepreneurial families and family businesses. It provides support to secure successful succession. For that matter efConsulting specializes in family protocol, leadership and property succession planning, managing the transition from family management control to independent management family conflict solving.

Maintree – Family Office Management is Multi-Family Office that was born out the growing need of Portuguese and foreign families for wealth management. Maintree provides services in the areas of tax consulting, real estate, asset protection, protocol, governance and family succession planning. Their aim is to support families implementing family governance models and early stage preparation for intergenerational transfer with the aim of safeguarding wealth for future generations.

Cambridge Family Enterprise Group- The Cambridge Advisors to Family Enterprise is a world leader in consultancy for business families and a pioneer family business’ systems knowledge globally. Founded by Prof. John Davis in 1989 in Cambridge (USA) this company provides advice to business families and leaders of family organizations in effectively managing complex and sensitive issues involving family, business, and property. It is the most traditional consulting firm for family business and family organizations in the world in topics such as: family company systems´ governance, succession, estate planning, family offices, philanthropy and family asset management.

Key Points:

Who supports Family Businesses in Portugal



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Moreover, there are other public institutions whose activities also include services dedicated to family businesses. We highlight here two of them:

AEP – Portuguese Entrepreneurs’ Confederation (http://www.aeportugal.pt/)

IAPMEI – Portuguese Institute for the support of SMEs (https://www.iapmei.pt/)

http://www.aeportugal.pt/

https://www.iapmei.pt/



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5. Identified Good Practices of Family Business Successful Succession

The growth of Family Business consultants in Portugal has contributed to the development of certain good practices to support the successful succession of FB. Good practices were highlighted by some of the FB consultants, and by a survey on Portuguese FB, developed in 2011 by AEP in which 30 firms were interviewed (AEP, 2012a). Although for confidentiality reasons companies that practice them are not usually identified, good practices identified are as follows:

a. Anticipated succession planning – elaboration of a succession plan anticipating eventual problems regarding future new leadership or succession rules and criteria.

b. Founding owner usually takes initiative to lead the succession process. c. The succession process is conducted with transparency and with the help of a FB

specialist who takes the role of intermediary between different family members related to the Family Firm.

d. Family Protocol – elaboration of a written document in accordance with all family members which proposes ground rules to prevent future succession conflicts. This also helps defining family members’ roles inside the company since the beginning, preventing intrafamily power struggles at the time of succession. Although 57% of the respondents from the AEP’s study assumed not having some type of family protocol, pact nor agreement, 70% consider that this type of document clearly influences the succession process (AEP, 2012c).

e. The existence of a Mission statement as well as Vision and Values statements has proven useful in the successor’s choice. The successor must identify himself with these statements to be able to continue the previous generation’s work.

f. Succession should not be faced as a specific moment in time but rather as a gradual process. The successor’s Responsibility, Authority and Property of the family business is gradually increased along the process. Successor and succeeded work closely for a period before the actual succession process begins This professional proximity between successor and succeeded often results in the transfer and better understanding, by the successor, of the company’s present mission, vision, and values, thus leading to a minimum loss of the leadership’s DNA.

g. Sharing of professional experiences – Family business consultants have noticed that succession processes are easier when the succeeded shares his/hers concerns, failures, successes etc. This increases the potential successor’s commitment and engagement with the business.

h. Role segmentation – Another good practice is the segmentation between personal and family roles and responsibilities. This works both as a catalyst for family and professional relations, and has proven helpful in succession processes.

i. Previous successor’s professional experience – Before taking on the family business, it is advisable that successors could work in other businesses, especially if their

Key Points:

Good practices of Family Businesses succession identified FB supporting organizations

and previous studies



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previous professional experience is in companies which are related to their Family’s core business. This contributes to professional vision and widens the successors networking abilities.

j. Successor’s family business engagement – another good practice relates to the importance of some years of previous experience in the FB, the knowledge of the market, and the existence of a real passion about the family’s core business.

k. Finally, when all the hypothesis have been explored and there is no chance of finding a successor within the family, FB’s managers must consider the chance of passing the power of the company to their managers (MBO) or even to sell the company to a third party.

Although good practices exist and are effectively implemented in some of the FB observed, it is not the standard procedure adopted by FB in Portugal on a regular basis (AEP, 2012b). According to a subsequent AEP study (AEP, 2012a), a successful succession process usually results in increased and improved family relations and seldom generates new development opportunities within the Family Business.



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6. Concluding remarks Considering the importance of FB in Portugal, special care must be taken to the problems and opportunities that these firms face during their lifetimes. Doing business as usual, FB face the same problems than all the other businesses but, although differing case by case, FB are also very peculiar, in the sense that usually all, or most, of the shareholders are relatives and many of their regular basis’ employees are family members. Despite having the advantage of working for the sake of something personal, thus allowing a potential better alignment between the firm’s mission and the personal mission of its employees, these peculiarities can also represent a disadvantage by potentially bringing conflict into the family and ultimately to the company. The situation of FB in Portugal is not much different than those observed in other EU countries. However, giving the specific difficulties of FB in Portugal to overcome the 3rd generation stage (Pordata, 2017), and considering their importance in terms of employment, GDP, and economic growth, there is a clear need to devise policies that allow to better explore their full potential and contribute to their resilience and progress. Among those policies, and despite the good practices observed, the analysis and support to the succession processes seem to assume a crucial importance and must be a general aspect to improve in family firms. The biggest challenges that FB face in Portugal concern:

1- The ability to deal with both emotion and reasoning in both fronts, family and company;

2- The ability to overcome the successor’s different, or lack of, influence and charisma, in managing family conflicts that may occur;

3- The need to improve management knowledge and competencies of both successors and succeeded managers of FB, a field where training assumes a crucial role;

4- Family governance, involving the balance between family, ownership, and gender balance rules, side-by-side with firms’ governance represent crucial aspects for the future of FB.



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Annex A: Bibliographical references AEP – Câmara de Comércio e Industria (2012a). Manual de Boas Práticas. O Desafio da Sucessão Empresarial em Portugal. Câmara de Comércio e Indústria: Lisboa. [AEP – Entrepreneurs’ Confederation of Portugal (2012a). Good Practice Manual. The challenge of succession in Portugal. Commerce and Industry Chamber: Lisbon.] AEP – Confederação Empresarial de Portugal, (2012b). Livro Branco da Sucessão Empresarial. O Desafio da Sucessão Empresarial em Portugal. Câmara de Comércio e Indústria: Lisboa. [AEP - Entrepreneurs’ Confederation of Portugal (2012b). White paper on firm succession. The challenge of succession in Portugal. Commerce and Industry Chamber: Lisbon.] AEP – Câmara de Comércio e Industria, (2012c). Estudo Quantitativo. O Desafio da Sucessão Empresarial em Portugal. Câmara de Comércio e Indústria: Lisboa. [AEP - Entrepreneurs’ Confederation of Portugal (2012c). Quantitative study. The challenge of succession in Portugal. Commerce and Industry Chamber: Lisbon.] AEP – Câmara de Comércio e Industria, (2012d). Estudo Qualitativo. O Desafio da Sucessão Empresarial em Portugal. Câmara de Comércio e Indústria: Lisboa. [AEP - Entrepreneurs’ Confederation of Portugal (2012d). Qualitative study. The challenge of succession in Portugal. Commerce and Industry Chamber: Lisbon.] Miller, Danny; Le-Breton Miller, Isabelle; Lester, Richard; Canella Jr., Albert (2007). Are Family Firms Really Superior Performers, Journal of Corporate Finance, Vol. 13, Issue 5 PWC (2014), Empresas familiares: O desafio do Governance – Inquérito Global sobre Empresas Familiares, Price Waterhouse Coopers (at: https://www.pwc.pt/pt/publicacoes/imagens/2014/pwc-familybusiness2014.pdf).

Annex B: Sources of information INE - National Statistics Institute

PORDATA – Database on contemporary Portugal (http://www.pordata.pt/en/Home)

Reports from AEP – Entrepreneurs’ confederation of Portugal (http://www.aeportugal.pt/)

Annex C: Organisations supporting Family Businesses Associação Portuguesa de Empresas Familiares (Portuguese Family Business Association) – Rua Castilho, 13 – D, 3º A, 1250 – 066 Lisboa, Portugal, Tel: (+351) 213 466 088, E-mail: [email protected] (http://www.empresasfamiliares.pt/)

Ef Consulting –

Rua Dr. Carlos Felgueiras 206 1º4470 – 157 Maia, Porto

https://www.pwc.pt/pt/publicacoes/imagens/2014/pwc-familybusiness2014.pdf

http://www.pordata.pt/en/Home

http://www.aeportugal.pt/

mailto:[email protected]?subject=Contacto

http://www.empresasfamiliares.pt/



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Tel: (+351) 960 037 003 Maintree – Family Office Management – Rua Tierno Galvan, Empreendimento das Amoreiras, Torre3 – Sala 608, 1070 – 274 Lisboa, Portugal Tel: (+351) 215 893 961 Mobile: (+351) 916 418 551 Email: [email protected] Cambridge Advisors to Family Enterprise – This consultancy firm operates from the Family Business Association’ office.

Annex D: Some statistics and basic information on Family Business Below are presented some statistical comparisons of family firms around the world, including some of the countries participating in the FABUSS’ project. These statistics were obtained from the Family Firm Institute (FFI) website available at: http://www.ffi.org/?page=GlobalDataPoints

Percentage of Family Businesses in the Private Sector

Percentage of Workforce Employed by Family Businesses

Percentage of Family Business Contribution to National GDP

mailto:[email protected]

http://www.ffi.org/?page=GlobalDataPoints

http://www.ffi.org/resource/resmgr/Images/ffi_GlobalDataPoints_01.jpg






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Some possible definitions of Family Business We present in this section some definitions to characterise a Family Business, as described by the FFI (see http://www.ffi.org/?page=definitions): Definition 1 Family Firms are those in which multiple members of the same family are involved as major owners or managers, either contemporaneously or over time (Miller, Le-Breton Miller, Lester, Canella, “Are Family Firms Really Superior Performers,” Journal of Corporate Finance, Vol. 13, Issue 5, 2007). Definition 2 Family firms are those in which the family controls the business through involvement in ownership and management positions. Family involvement in ownership (FIO) and family involvement in management (FIM) is measured as the percentage of equity held by family members and the percentage of a firm’s managers who are also family members (Sciascia and Mazzola, Family Business Review, Vol. 21, Issue 4, 2008). Definition 3 A family enterprise is an economic venture (enterprise group) in which two or more members of a family (family group) have an interest in ownership (owners) and a commitment to the continuation of the enterprise. Definition 4 The family business is a business governed and/or managed with the intention to shape and/or pursue the vision of the business held by a dominant coalition controlled by members of the same family or a small number of families in a manner that is potentially sustainable across generations of the family or families. Definition 5 A firm of any size is a family business if:

1. The majority of decision-making rights are in the possession of the natural person(s) who established the firm, or in the possession of the natural person(s) who has/have acquired the share capital of the firm, or in the possession of their spouses, parents, child, or children’s direct heirs.

http://www.ffi.org/?page=definitions




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2. The majority of decision-making rights are indirect or direct. 3. At least one representative of the family or kin is formally involved in the governance of the firm. 4. Listed companies meet the definition of family enterprise if the person who established or acquired the firm (share capital) or their families or descendants possess 25 percent of the decision-making rights mandated by their share of capital (European Union definition 2009).

Statistics concerning the importance of FB in Portugal Based on the data obtained from APEF, we present below some statistics concerning the importance of FB in Portugal. Although not statistically representative, we consider that the sample used represents generally the reality of FB in Portugal:

Family Business in Portugal . An Overview Generations in family business in Portugal (Members of PFBA - Portuguese Family Business

Association)

Revenue from Family Business Owners (Members of PFBA)

Sector of Activity of Family Businesses Members of the PFBA

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Regional Location of PFBA Members

Share of Capital owned by the family in businesses of the PFBA Members

Number of staff belonging to the company of the PFBA Members

Authors:

José António Porfírio, Tiago Carrilho, Bernardo Figueiredo,

Lisbon, June 2017



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Date post:	22-Jul-2018
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An Overview of the Environment for Family Businesses in …€¦ · for Family Businesses in...

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