FAMILIES IN COMMAND 6.58 million jobs
PROVIDED BY FAMILY BUSINESSES IN SPAIN (Source: Institute of Family Business in Spain)
COMPARED TO 3.28 million jobs
CREATED BY NON-FAMILY BUSINESSES (Source: The Diplomat in Spain)
85%
50% 70% 67%
73% 32%
OF SPANISH BUSINESSES ARE FAMILY OWNED AND/
OR CONTROLLED (Source: Impact of Family Business on Economic Development: A Study of Spain’s Family-Owned Supermarkets (2017) by Ramón Sanguino)
GOVERNMENT POLICY
OF SPAIN’S TOP 3,000 BUSINESSES ARE FAMILY
OWNED (Source: Sanguino, 2017)
OF SPAIN’S GDP IS CONTRIBUTED BY FAMILY
BUSINESSES (Source: Sanguino, 2017)
OF SPANISH PRIVATE SECTOR EMPLOYMENT IS PROVIDED BY FAMILY
BUSINESSES (Source: Sanguino, 2017)
Many family businesses, especially
OF SPANISH FAMILY BUSINESSES WITH WOMEN ON THEIR MANAGEMENT TEAMS
COMPARED TO OF ALL SPANISH BUSINESSES WITH
WOMEN ON THEIR MANAGEMENT TEAMS (Source: Institute of Family Business in Spain)
smaller ones, went to the wall during the downturn, and in the previous decades the proportion of Spain’s largest businesses that were family owned had fallen. Nevertheless, family businesses still form the backbone of the Spanish economy, accounting for 85% of companies and 70% of GDP. Many of the country’s largest— and internationally best known— companies remain family controlled. The global banking giant Santander
is run by a fourth-generation family member, Ana Patricia Botín, who has been ranked as one of the world’s 10 most powerful women. Among Grupo Santander’s key
53% ISSUE 73 | 2018
OF THE COUNTRY’S LARGE FAMILY BUSINESSES LACK
A SUCCESSION PLAN (Source: IESE Business School, KPMG, Russell Reynolds Associates)
acquisitions was, in late 2013, a 51% stake in another iconic Spanish family business, the global retailing powerhouse El Corte Inglés.
The ease of doing business in Spain is a boon for family businesses. Spain was ranked 28th globally in the World Bank report Doing Business 2018, ahead of the likes of France, the Netherlands and Switzerland. That same report praised the country’s move to reduce the court costs for filing a claim over breached contracts, something that should help to ensure that contracts are adhered to. Succession remains a key challenge, with the proportion of Spanish family businesses reaching the second generation below the global average. It is not difficult to understand why: a 2017 study by Spain’s IESE Business School, consultancy KPMG, and executive search firm Russell Reynolds Associates found that 53% of the country’s large family businesses lack a succession plan. Rather than divide the company down the generations, Dr Marc Bernadich, entrepreneurship and family business professor at the Central University of Catalonia, Manresa, says “more and more” families are choosing “the progressive sale of the company.” Another trend is to bring in non-family executives, while retaining ownership. Some outside executives have performed especially well. Inditex’s chairman and chief executive, the non-family member Pablo Isla, was in 2017 named the world’s best executive by Harvard Business Review on the back of an 11.5% jump in revenues in the first half of that year and impressive performance in previous years. Following the same pattern, in January 2018 a non-family member took the helm at Esteve, a Barcelona- headquartered pharmaceutical company. There are other family firms that have done the same. “Large family businesses have been incorporating managers outside the company for years, with the intention of ‘professionalising the company’. This has been and is a tendency in Spain,” Bernadich says. “I believe that the trend should be just the opposite, since the family factor (well-trained) provides more than management without emotional involvement. For that reason the investment funds are buying family businesses, maintaining in many cases the family managers in front.” Spain’s large family businesses have been growing their international footprint, with many forming business groups with overseas firms; Morocco has been a particularly important investment destination.
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