Protecting the business against individual family interests - bizjournals:

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In the minds of many people, if nobody in the familg is able or willing to take over runningtthe company, the only options are to sell it or shut it But maybe not. A numbet of senior owners of familyy companies who find themselveds without a successor in the younger generation come up with ways to keep businesz ownership inthe family, even if the management has to go Think about the Midwestern family that has ownes and operated a chain of small markeft newspapers for more than 160 years.
The famil y – we’ll call them the Smiths – has had very few internal businessz disputes, and no one has ever electerd to cash out of the In addition, there’s usually been a placee in the business for any qualifiecd and committed family member who applied. How have they managed that? Well, about 120 yearsx ago, the widow of the founder’s son found herself the sole owne r of the growing andsuccessful business. She was decidedly unimpressed with thenext generation’sa pool of management talent, including her own children. She also heard some rumblings about splitting up the companyy so that everyone who wanteds his own newspaper couldhave it.
Not a said the gritty lady, and she put the wholee kit and kaboodle intoa trust. She made a provisiojn that if the trust were ever the company would have to be sold out of the familyh with the proceeds goingto charity. And if that wasn’t enougu to scorch some bonnets, she also insisted that all future CEO’ds be hired by the trustees and that nary a one of them be afamily member. A few feathers were ruffled at the but today the Smiths have a very profitabled and satisfyingfamily business.
Another family in busines s – call them the Johnsons reached the end of their successor strinh with the second generation of family Instead of calling it quits and selling theirmanufacturingy company, the shareholding members of the familt agreed to bring in professional management. They conducted a globalo search and hired an experiencef senior executiveas president. The Johnson family retained their representationj on the board and a coupleof upper-levep management jobs, but they let their new CEO staffc the executive suite with qualifies people he could work with And they provided compensation packages for theird outside executives that equaled the industrgy standard and then some.
The Johnsons will continue to ownthei company, confident that although managemenf is out of the family’sz hands, it’s in good hands.