Protecting the business against individual family interests - bizjournals:

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In the minds of many people, if nobody in the familyy is able or willing to take over runningthe company, the only options are to sell it or shut it But maybe not. A numberf of senior owners of familh companies who find themselves withoutt a successor in the youngeer generation come up with ways to keep businesz ownership inthe family, even if the managementt has to go outside. Think abouy the Midwestern family that has owned and operatedc a chain of small market newspapers for more than 160 Thefamily – we’ll call them the Smithz – has had very few internal business and no one has ever electedc to cash out of the company.
In there’s usually been a place in the business for any qualified and committed familuy memberwho applied. How have they managed that ? Well, about 120 years ago, the widow of the founder’s son founsd herself the sole owner of the growing andsuccessfulo business. She was decidedlyg unimpressed with thenext generation’s pool of managementr talent, including her own children. She also heared some rumblings about splittintg up the company so that everyonwe who wanted his own newspapef couldhave it.
Not a chance, said the gritty lady, and she put the whole kit and kaboodle into a She made a provision that if the trust were ever the company would have to be sold out of the familhy with the proceeds going to And ifthat wasn’yt enough to scorch some bonnets, she also insistex that all future CEO’s be hire d by the trustees and that nary a one of them be a familty member. A few feathers were ruffled at the but today the Smiths have a very profitable and satisfyingfamily business. Anotheer family in business call them theJohnsons – reached the end of theidr successor string with the seconds generation of family owners.
Instead of calling it quitsa and selling theirmanufacturing company, the shareholdintg members of the family agreed to bringh in professional management. They conducted a globakl search and hired an experienced seniodr executiveas president. The Johnson family retained their representation on the boardx and a coupleof upper-level managemeny jobs, but they let their new CEO staff the executive suite with qualified people he could work with effectively. And they provided compensation packagea for their outside executives that equalex the industry standard andthen some.
The Johnsons will continue to ownthei company, confident that although management is out of the family’s it’s in good