Post by account_disabled on Oct 17, 2023 22:48:51 GMT -6
Tramontina, WEG SA, Cia Hering, Magazine Luiza and Grupo Votorantim – what is common between these companies? In addition to representing large Brazilian family companies, they have all implemented solid Corporate Governance practices. In this article, we will explore how Corporate Governance plays a fundamental role in preserving the longevity and effective management of Brazilian family businesses.
It is worth highlighting that the fundamental role of Corporate Brother cell phone list Governance is to provide equity, transparency and quality to business management, establishing clear roles and responsibilities between the various members of the company and interested parties. Thus, it is noted that in family businesses, Corporate Governance is even more necessary, considering the potential conflict between the Three Circles — Family, Property and Business, as illustrated below:
Conflicts of interest: the challenge of family businesses
According to IBGE data, 90% of companies in Brazil have a family profile, but do they all maintain Corporate Governance practices to preserve their longevity and avoid conflicts of interest? Conflicts in family businesses, when left untreated, can become the norm.
For example, the distribution of dividends can generate friction between employees who are family members and those who are not, creating a feeling of injustice. Furthermore, succession in family businesses often triggers disputes between family members and shareholders with different conceptions of the company's future.
Corporate Governance as a Solution
Corporate Governance offers a lens through which family businesses can build more responsible and transparent management. This can be achieved through Succession Planning, the establishment of a Board of Directors or even a Family Advisory Council, with a focus on establishing a Manual of Conduct between family members and resolving emotional conflicts.
Advance Succession Planning can facilitate the company's longevity and protect it against a “ hostile takeover ”. By identifying potential successors and implementing individual development plans, it is possible to prepare them to take on a role that requires high responsibility.
Read also: Reporting Channel for Small and Medium-sized Companies
Case studies: successful implementation of Corporate Governance
We take the example of WEG SA, a company from Santa Catarina founded in 1961, which has been in the Brazilian market for 62 years. It started as a small workshop and today it is the fifth largest company in Brazil. Family members maintained, from an early age, clear values of accountability, which continue to this day.
Since the 1970s, WEG has maintained the position that the company would be governed as a true publicly traded corporation and that it would not leave the company in the hands of unprepared family members, considering successors. An example of this commitment is the participation of Tânia Conte Consentino, CEO of Microsoft do Brasil, among the independent members of the Board of Directors of WEG SA
Another success story is that of Tramontina, a century-old company, founded by an Italian immigrant in 1911, which is now present in almost every home in Brazil. Recently, the grandson of the founders, Clovis Tramontina, after 30 years as CEO, handed the position over to Eduardo Scomazzon, his partner and friend. The plan is for Clovis' son, Marcos Tramontina, financial director, to take over the position in the future, as well as members of the Scomazzon family, who will alternate the position every three years .
From this perspective, there are other ways of organizing a family business that aim to resolve emotional conflicts. Thus, the Votorantim Group stands out, which innovated by promoting a Family Council with the participation of consultants specialized in mediating and managing possible conflicts. This initiative encourages constructive debate between generations, preserving family values and ensuring the perpetuation of the legacy.
It is worth highlighting that the fundamental role of Corporate Brother cell phone list Governance is to provide equity, transparency and quality to business management, establishing clear roles and responsibilities between the various members of the company and interested parties. Thus, it is noted that in family businesses, Corporate Governance is even more necessary, considering the potential conflict between the Three Circles — Family, Property and Business, as illustrated below:
Conflicts of interest: the challenge of family businesses
According to IBGE data, 90% of companies in Brazil have a family profile, but do they all maintain Corporate Governance practices to preserve their longevity and avoid conflicts of interest? Conflicts in family businesses, when left untreated, can become the norm.
For example, the distribution of dividends can generate friction between employees who are family members and those who are not, creating a feeling of injustice. Furthermore, succession in family businesses often triggers disputes between family members and shareholders with different conceptions of the company's future.
Corporate Governance as a Solution
Corporate Governance offers a lens through which family businesses can build more responsible and transparent management. This can be achieved through Succession Planning, the establishment of a Board of Directors or even a Family Advisory Council, with a focus on establishing a Manual of Conduct between family members and resolving emotional conflicts.
Advance Succession Planning can facilitate the company's longevity and protect it against a “ hostile takeover ”. By identifying potential successors and implementing individual development plans, it is possible to prepare them to take on a role that requires high responsibility.
Read also: Reporting Channel for Small and Medium-sized Companies
Case studies: successful implementation of Corporate Governance
We take the example of WEG SA, a company from Santa Catarina founded in 1961, which has been in the Brazilian market for 62 years. It started as a small workshop and today it is the fifth largest company in Brazil. Family members maintained, from an early age, clear values of accountability, which continue to this day.
Since the 1970s, WEG has maintained the position that the company would be governed as a true publicly traded corporation and that it would not leave the company in the hands of unprepared family members, considering successors. An example of this commitment is the participation of Tânia Conte Consentino, CEO of Microsoft do Brasil, among the independent members of the Board of Directors of WEG SA
Another success story is that of Tramontina, a century-old company, founded by an Italian immigrant in 1911, which is now present in almost every home in Brazil. Recently, the grandson of the founders, Clovis Tramontina, after 30 years as CEO, handed the position over to Eduardo Scomazzon, his partner and friend. The plan is for Clovis' son, Marcos Tramontina, financial director, to take over the position in the future, as well as members of the Scomazzon family, who will alternate the position every three years .
From this perspective, there are other ways of organizing a family business that aim to resolve emotional conflicts. Thus, the Votorantim Group stands out, which innovated by promoting a Family Council with the participation of consultants specialized in mediating and managing possible conflicts. This initiative encourages constructive debate between generations, preserving family values and ensuring the perpetuation of the legacy.