We look back with satisfaction to a successful evening in the magnificent setting of the Museum van Deinze en de Leiestreek and were pleasantly surprised by the numerous attendance.
As a niche consultancy firm focused on shareholder interests and corporate governance, Deminor regularly organizes very enthusiastic panel discussions by and for entrepreneurs. We are pleased that the subject of the non-active shareholder in the family company has caught a lot of attention.
Whenever Deminor advises SME’s or family company’s, in the context of a transaction with respect to the company, mediating between the shareholders or the sale or purchase of a minority stake, we note that business owners are interested to know more about the approach and methods of Deminor. In all our interventions, Deminor looks for solutions and tries to align the interests between the shareholders, the board of directors and the management, with sufficient distinction between the interests of the family and those of the company.
Barbara Torfs and Matthieu Boone have both debated with much enthusiasm and passion about “The non-active shareholder in the family business”.
We started with the question: “How do you see the role of a shareholder in a family business? Is there a distinction between active and non-active shareholders?”
Barbara Torfs indicated that involvement, commitment and interest by the non-active shareholders are the key to success in the family business: all noses have to face in the same direction; all members of the family should believe in the same values. For that reason, the family Torfs has chosen to define its internal relationships in the form of a family charter.
Matthieu Boone also emphasized the importance of the (minority) shareholders given that they, in times of crisis or for the succession of the company, participate in in important decisions.
Subsequently, we asked to share their opinion about the so-called system of branches within family business.
Both Schoenen Torfs and Lotus Bakeries chose to apply the system where each branch of the family has a representative on the board of directors. Deminor sometimes notes that families choose to abandon this system in the next generations.
In a further question, we asked both entrepreneurs about their opinion regardingthe entry of family members in the family business.
Lotus Bakeries applies another policy than Schoenen Torfs. Family members of Schoenen Torfs can be active at all levels within the company, while family members of Lotus Bakeries may only enter or work at management level. Matthieu Boone explained the origin of this rule whereas sooner or later an inherent conflict arises between family members who are working at a lower level and those at management level.
Barbara Torfs explained the open policy within Schoenen Torfs, where applications from family members are also processed by the HR manager.
Finally, the family charter has been discussed as a tool for aligning the interests between shareholders and providing adequate information and transparency.
According to Matthieu Boone, non-active shareholders should be both emotionally and rationally connected to the company. Emotionally through a sense of pride and ambassadorship since they are part of the family business, rationally by for example providing a good dividend policy.
In conclusion, the alignment of the interests between shareholders, directors and management, as well as the alignment of the interests between family members, company and its shareholders, is critical. As a result, it is most important to increase transparency, communication and involvement of the (minority) shareholders, including those who are not active within the family business. Timely anticipating a succession or generation change is of great importance for sustainable value creation.
For more information regarding this event or following events, please contact Bernard Thuysbaert