Then there are holding
These founders love their company and regard it as their contribution to humanity
CARLSBERG EXPORT Industrial foundations exist globally, yet Denmark is a leader with some 1,300 in operation. Some experts estimate the value of listed companies
controlled by Danish foundations at about 68% of the total market capitalisation of the Copenhagen Stock Exchange. Much of Denmark’s business sector—at least 120
companies—is controlled by foundations whose firms have global activities such as Carlsberg, the brewer, and shipping giant Maersk. Industrial foundations boost longevity too, as they
are meant to. Yet it is not clear, Thomsen says, that this advantage translates into better financial performance. Studies discovered foundation-owned firms
have similar economic performance as companies with investor ownership, family ownership, or other structures. The model, for its various appeals, is not unique to
Denmark. Descendants of the founding Hoffmann and Oeri families own more than half the bearer shares with voting rights in Swiss healthcare giant Roche. The Merck family controls 70.3% of the company’s shares in its namesake chemicals and pharmaceuticals group. Both are structured through family trusts.
ISSUE 73 | 2018
companies. In terms of multigenerational firms, holding companies can have a similar stabilising effect, by imposing centralised governance across enterprises with a multitude of affiliate activities. “The purpose of setting
up a holding company is to coordinate ownership of affiliate companies, allowing majority shareholders, such as the controlling family, to effectively use their shares of multiple firms to influence those firms in a consistent way,” explains Josh Hsueh, a professor at the Center for Family Business at Switzerland’s University of St Gallen. As a holding company
coordinates numerous affiliates, it automatically creates its own internal market. Benefits range from eased transfer of human capital and lower-cost financial resources to internal transactions with better pricing, as well as knowledge sharing through interlocking board directors and executives across affiliate companies. A key advantage for a
multigenerational business is coordinated ownership, particularly when consensus begins to falter among clans in the later generations.
STABILITY IS IN THE EYE OF THE
BEHOLDER Industrial foundations are foundations that own companies. Outside of Scandinavia, they are a rarity as most companies are ultimately privately-held, family-owned, public or owned indirectly through investment companies, pension funds, or government. As legal entities typically created by the founder to take control upon his or her death, industrial foundations are governed by trustees, who are asked to respect the will of the founder, normally seeking to ensure the company’s independence. Industrial foundations typically have commercial activities and own one or more businesses. Many have dual purpose—altruistic and commercial—where businesses divert dividend income to charitable causes as a means of tax avoidance and for research and development endeavours.
CAMPDENFB.COM 25
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88