Many family businesses claim to prioritize stewardship, but few truly put it into practice.
Instead of an intangible feel-good notion, stewardship is realistic and measurable. Merriam-Webster defines stewardship as “the careful and responsible management of something entrusted to one’s care.”
In family businesses, stewardship means that the current owners possess a long-term perspective. Predecessors have entrusted the enterprise to them, not to do with as they wish, but to safeguard and grow the business for future generations, with the goal of passing on a business that is so much better than what they have inherited.
If you view the business as your own fiefdom, then:
You treat the enterprise as your personal piggy bank. You charge your trips, utilities and children’s tuition to the company, without caring that resources are finite. You are not a steward.
You do not listen to others, believing that what has worked in the past will always be the ideal path, regardless of the changing business landscape. You are not a steward.
You hold on to the reins of the business no matter what, leaving no viable successor—and a battle royale among heirs upon your demise. You are not a steward.
You do not invest in the education and training of your successors, since you are too busy to mentor anyone. You reject all innovations because they cost money (which, of course, they will). You are not a steward.
You do not trust anyone outside of family (sometimes, not even within the family), so you limit the number of skilled employees who can lead your business into the future. You are not a steward.
If you view the business solely as a source of funds, then:
You have a sense of entitlement. You are perennially late to the office, take long breaks, check social media while supposedly at work. You flout company rules, but demand salary increases, just because you are part of the family. You are not a steward.
You demand maximum dividends annually, even if the funds would have been better plowed back into the enterprise for continuous improvement. You do not care about the growth of the business, as long as you get the expected cash regularly. You are not a steward.
You, as a shareholder, do not take time or effort to learn about the business. You leave everything to other family members or professional executives, and when they make mistakes—inevitably so—you are quick to pin the blame on them. You are not a steward.
You quickly sell the business to the first bidder who comes calling, even to the detriment of existing employees and other family members. You are not a steward.
You do not contribute to the wider community, since such efforts require time, effort and resources. You do not understand that only when family businesses give back to society and earn a sterling reputation can they succeed in the long run. You are not a steward.
Instead you are a proprietor.
The steward focuses on the family, employees, stakeholders and community. The proprietor focuses on the self. The steward thinks long term, the proprietor desires immediate gains.
Stewardship principles
Stewardship Asia lists seven principles to foster stewardship in family businesses:
Ensure that family businesses are driven by purpose, anchored on values.
Cultivate an ownership mentality not just for owners, but for employees as well.
Integrate short- and long-term perspectives.
Expect changes, nurture agility and strengthen resilience.
Embrace inclusiveness and build strong stakeholder relationships.
Do well, do good, do right: contribute to the community.
Be mindful of succession.
For details, visit stewardshipasia.com.sg.