Corporate governance
Although older firms did better in this respect, younger family firms were superior in terms of establishing incentive schemes and diversity of their management teams.
Organisational design
As regards policies and processes for daily operation, older family firms again did better. They also have a better human resources policy. They often have better information systems in place and their resource allocation and reporting processes are more formalised.
Succession
In terms of family ownership and succession, the difference was not great. Scores for succession planning were quite similar, which is somewhat surprising. In older firms, there were slightly fewer disagreements and they were more likely to discuss a succession plan, according to the website of the INSEAD business school.
Similar gap to other regions
Compared to similar groups of family firms in Asia Pacific and the Middle East, there is a smaller discrepancy between Latin American family firms. Latin America’s older firms have lower scores and younger firms have higher scores when compared to their counterparts from these regions.
When firms with remarkably low scores are excluded, the gap between young and old family firms is much closer to what can be observed in Asia Pacific and the Middle East.
The bottom line is: there is an institutionalisation gap between younger and older family firms. The former thus need to work on increasing the institutionalisation of their business.
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