FOR IMMEDIATE RELEASE
Media Contact:
Steve Christensen
Communications Manager
(312) 915-6164
schris6@luc.edu
Non-Family CEO Research Now Available
Qualitative Study Analyzes Family Business Environments and Roles of the Non-Family CEO
Please contact Loyola University Chicago’s University Marketing and Communications department for more information or to arrange interviews with co-authors or key contacts.
About the Study
Introduction
In today’s marketplace many family firms, if they are to succeed and grow, must look outside the family to hire top executives. Hiring these non-family leaders can generate a number of unique challenges, making it even more important to create an environment that allows the non-family executive the best opportunity to succeed. What’s the best way to do this? That’s just one of the questions the Loyola University Chicago Family Business Center set out to answer in this study.
Key Findings
- Four essential factors are necessary to create successful relationships between family firms and non-family CEOs (NFCs)
- Business Acumen – Non-family executives must be highly capable performers, but also display character and integrity.
- Strong Board – This group must serve as a buffer between family and non-family leaders, and also provide the CEO support when unpopular, but necessary, decisions are made.
- Comfort with Family Dynamics and Values – Successful NFCs often share the family’s values while avoiding entanglements in family politics.
- Effective Family Council – Representative governance group tasked with training family members to think and act as owners, not managers.
- Non-family CEOs must bring needed skills or experience to their employers, yet they must also share a relationship based on intrinsic motivation and a philosophy of involvement rather than controlmust be both an agent and steward.
- Successful NFCs often develop an affinity for and identification with the family. NFCs that lack that affinityin favor of an exclusive focus on business performance and compensationwill likely experience a disappointing tenure.
Conclusions
- Not all family businesses treat non-family managers the same, nor expect the same things from them; families vary in their level of cohesiveness, some naturally more oriented toward business matters, and others toward family matters.
- Findings show that family businesses can structure themselves and govern non-family CEOs in a way that leverages the NFC’s ability to move the business forward while interacting with the family in rewarding ways.
-Loyola-