10th Global Family Business Survey

From trust
to impact
Why family businesses
need to act now to ensure
their legacy tomorrow

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Foreword
In the best of times, the strengths of family businesses areoften overlooked as unicorns take flight and the stock market
follows. But when times are tough, the strong fundamentals
that are their hallmark—commitment to values, long-term
thinking, sensible leverage—are what recoveries are basedon. It happened in 2009 after the financial crisis whenfamily businesses rebounded to build back opportunities
in a shattered world economy. And it will happen again in
the post–COVID-19 recovery for two key reasons: familybusinesses are more trusted than other institutions andleaders, and, in most sectors, they are more resilient.
The Edelman Trust Barometer confirms the first reason: 67%of respondents in Edelman’s 2020 report said they trusted
family businesses—against 58% for public companies—
making family businesses the most trusted type of enterprise.
And our tenth Family Business Survey, conducted from
October through early December 2020, confirms the second.
Only 21% of family businesses say they required additional
capital in 2020, at a time when companies raised a record
US$3.6tn1 in capital from public investors to ensure liquidity.
And the majority of survey respondents expect a return tostrong growth by 2022.
This is good news for the world economy, given that familybusinesses are estimated to contribute more than half of
GDP and two-thirds of employment.2 But it goes deeper thanthat. In a world where capitalism is under fire3 and people
are demanding more accountability, family businesses canhelp win back trust. The Edelman Trust Barometer clearlyshows how trust is built on a foundation of competence andethics. Of the four main institutions of society—government,
business, non-governmental organisations and the media—
only business scores positively on both counts.
Family businesses have the characteristics and capabilities
needed to claim the sweet spot where competence andethics converge. But, as the results of our survey also show,
thriving in today’s world will require a change of mindset;
a rethinking of their priorities and behaviours, includingheightened investment in the digital tools needed for
economic resilience; and a new definition of legacy. The
world is changing, and so is the formula for lasting familybusiness success.
Family business owners want, above all, to create a company
that makes a positive impact and ensures a legacy for future
generations. They have earned a reputation for prioritising
their employees and the communities they serve. They ‘give
back’ in the traditional sense, but their approach is based ona definition of legacy that is changing.
In today’s business environment, in which the pace of changeis accelerating, profit will need to be aligned with purpose.
And as more pressure is put on companies to demonstrate
their environmental, social and corporate governance (ESG)
credentials, our survey indicates that family businesses are
not assuming the leadership role they could. They are notprioritising key areas such as sustainability, which is no longer

1	“Companies have raised more capital in 2020 than ever before,” Economist magazine, 10 Dec. 2020, https://www.economist.com/business/2020/12/09/companies-haveraised-more-capital-in-2020-than-ever-before.
2	Contributions of family businesses towards GDP are difficult to estimate due to the different definitions of family-owned and controlled. See Belén Villalonga andRaphael Amit, “Family ownership,” Oxford Review of Economic Policy, Volume 36, Issue 2, Summer 2020, pp. 241–257, https://academic.oup.com/oxrep/article-abstract/36/2/241/5813058.
3	Fifty-six percent of respondents in the Edelman Trust Barometer’s 2020 survey say capitalism as it exists today does more harm than good in the world. See Edelman,
Edelman Trust Barometer 2020, 2020, https://www.edelman.com/trust/2020-trust-barometer.

3 | PwC Family Business Survey 2021

a ‘nice to have’ for those who can afford to show concern;
rather, it’s a business imperative. If family businesses fail todemonstrate their commitment to sustainability with concrete
actions, they may risk losing the trust and goodwill that givethem licence to operate.
We surveyed 2,801 family businesses in 87 territories
and then conducted three panel discussions with familybusiness leaders to test our findings. Based on the results,
we argue that family businesses, though resilient, should
recognise their blind spots and take a leadership role that
demonstrates their commitment to sustainability.
As our surveys in the past have shown, family businesses
are on a learning curve to marry their personal values with
their business purpose, and vice versa.4 ESG was alreadyrising up the list of business resolutions long before thearrival and spread of COVID-19. Today, it’s not a questionof whether it’s a good idea to prioritise ESG practices, but
only of how long it will take for consumers, investors, lenders
and governments to punish those that don’t. The OECD has
warned against a return to business as usual, arguing that
COVID-19 highlighted the vulnerabilities in our societies
and economic system.5 Public sentiment, too, has shifted;

even before the pandemic, 43% of consumers expectedbusinesses to be accountable for their environmental impact.6
Companies with the highest ESG ratings are outperforming
others and recovered more quickly from the first wave of thepandemic.7

The time to act is now if family businesses
want to keep their legacy for future
generations.

Dr. Peter Bartels

Global Leader, Entrepreneurial
and Private Business
PwC GermanyPeter EnglischGlobal Family Business and EMEA
Entrepreneurial andPrivate Business Leader
PwC Germany

A message from the chairman of the Family Business Network International
Family Business Network International (FBN) is pleased to have collaborated with PwC for the tenth edition of its
global Family Business Survey, which builds on PwC’s long-time involvement in supporting business-owning families
and collaborating with many FBN chapters around the world.
The unprecedented COVID-19 pandemic has tested business families’ capacity to adapt to change and be resilientacross generations. Family businesses contribute meaningfully to both economic growth and employment, and with
their inherent focus on long-term success and responsible ownership, many create a more purpose-driven model ofbusiness. These contributions have also been amply demonstrated during the pandemic.
As the survey results indicate, there are two things we family businesses can do better: digitalisation andsustainability. Considering this report’s recommendations, we invite business families to move from aspiration toaction in both these areas that are increasingly essential for our future.
If we apply the same spirit of innovation, entrepreneurship and generational resilience for which family businesses
are known to these two areas, we can enhance the long-term success of our businesses and help build a better,more sustainable world.
Please join us in this journey.
Farhad Forbes
Chairman, Family Business Network International4	PwC, Global Family Business Survey 2018: The values effect, 2018, https://www.pwc.com/gx/en/services/family-business/family-business-survey-2018.html.
5	OECD, Building back better: A sustainable, resilient recovery after COVID-19, 5 June 2020, http://www.oecd.org/coronavirus/policy-responses/building-back-better-a-sustainable-resilient-recovery-after-covid-19-52b869f5/.
6	PwC, The consumer transformed: Global Consumer Insights Survey 2020, 2020, https://www.pwc.com/gx/en/industries/consumer-markets/consumer-insights-survey.
html.
7	Alex Rolandi, “ESG rating ‘linked to outperformance’ amidst coronavirus pandemic,” Funds Europe, 16 Apr. 2020, https://www.funds-europe.com/news/esg-rating-linked-to-outperformance-amidst-coronavirus-pandemic.

4 | PwC Family Business Survey 2021

Contents
5			Introduction and key findings
7			 Growth in the time of COVID-19		
10 Sustainability: Translating ambition into action
14		The view from the front line: Peer recommendations

17		 Still behind the digital curve19		 The view from the front line: Peer recommendations

22		Family dynamics: Holding up a mirror
25		The view from the front line: Peer recommendations

28		Redefining the formula for family business success
29		 Methodology
30		 Acknowledgements
32		 Key contacts

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Introduction andkey findings

The year 2020 was a test for everyone, as COVID-19
disrupted lives and livelihoods. The health and safety of theirpeople remained top of mind for family businesses as theyreconfigured their operations to combat shrinking economies
and an uncertain future. Yet optimism remains high for growthin 2022, despite the fact that the majority of the 2,801 familybusiness leaders who took the survey did so before news of
the vaccines.
The first section of this report looks at the financial resiliencein family businesses and shows how they are prepared tolead the post-COVID recovery. The second section highlights
the need to prioritise the ESG agenda and rethink how
family businesses contribute to reducing climate change, tosustainable business practices, and to society.
The third section evaluates the state of technologicaltransformation in family business. The pandemic has
proved the vital importance of strong digital capabilities forbusinesses. But only one in five family businesses say theirdigital transformation journey is advanced—though they
continue to believe digitalisation is a top priority.

The final section focuses on family dynamics. The very
relationships that make a family business strong can also
hold it back. It’s a difficult subject for many, but introducing amore professionalised approach to governance takes emotion
out of the equation and correlates with business success.
Perhaps it is not surprising that during the pandemic, anddespite stalling progress on instigating formal governanceprocedures, the number of respondents who have formalised
succession planning has doubled to 30%.
We tested our findings by convening three panels of familybusiness owners and executives, representing a mix ofbusinesses and industries from around the world. Their views
and our recommendations are captured at the end of eachsection.
The world is changing; now is the time to embrace a new
formula for lasting family business success.

6 | PwC Family Business Survey 2021

2,801

87

55%

86%

respondents

territories

of surveyed businesses
grew in the 12 months
before COVID-19

of surveyed businesses
are expecting to growin 2022

Key findings
The responses of the 2,801 owners and executives who participated in the survey reveal important insights into how familybusinesses operated in a pandemic year.

Economic resilience is highProgress on digital transformation is slow

79%

38%

say they needed no additional capital in 2020, and only
one-third (34%) are cutting dividends during the crisis.
64% expect to grow in 2021.

say their digital capabilities are strong. In the 2018
Family Business Survey, 80% were worried about innovationand technology, and 57% said they would invest in it.

There’s a real desire to lead on sustainability,
but action has been slow

There’s resistance to change andprofessionalisation

55%

51%

say there is an opportunity for them to lead the way onsustainable business practices, but only 37%, on average,
have a sustainability strategy in place.

have a documented vision and written purpose statement,
30% have succession plans, and 29% say there is a
resistance to change.

7 | PwC Family Business Survey 2021

Growth in the timeof COVID-19

The COVID-19 pandemic has been an
extraordinary test of resilience for almost all
businesses. Family businesses are rising tomeet the challenge at a time when financial
uncertainty was already affecting forecasts.
Before the pandemic, 55% of respondents
were predicting growth for 2020—the lowest
percentage since 2010, the year following the
global financial crisis (see Figure 1).

8 | PwC Family Business Survey 2021

Now, in looking beyond COVID-19, almost half (46%) offamily businesses expect sales to decline. But 86% anticipate
a return to pre-pandemic growth rates by 2022, an impressive
level of optimism given that no vaccines had been approved
when the survey was conducted.
Not surprisingly, the impact of COVID-19 on sales is unevenacross sectors. Eighty-four percent of those in hospitality
and leisure—the highest proportion of any sector—expect
a contraction, followed by 64% in automotive and 63% inentertainment and media.

“We had three principles to get us through the crisis: tolook after our people, to preserve cash and to build a betterbusiness for the future. Some parts of the business doubled
overnight, while other parts, such as restaurant supplies,
disappeared. I feel a great sense of pride in how we helped
the community, delivering food to people who couldn’t get tothe shops and helping those in need.”
Nicholas Oughtred, chairman, William Jackson Food Group, foodand drinks manufacturer and supplier, UK

Resilience
Only one-third (34%) of surveyed businesses have had tocut dividends, and 31% of family members have taken salary
cuts. Overall, only one in five businesses (21%) needed toaccess extra capital; 15% of the owners are putting in moreof their own cash, and a further 23% say they are prepared to
do so if necessary.

Figure 1: Family businesses expect the COVID-19 pandemic to impact growth more than the great recession did2021 survey Q: Looking back over the last financial year, before the COVID-19 pandemic, would you say your sales have been… And what do you
think the impact of the COVID-19 pandemic will be on your sales?
2007–2018 survey Q: Looking back over the last financial year would you say your sales have been…
n Sales growth n Sales reduction

75%
65%

65%

69%
64%
55%

48%

28%

9%

10%
19%

18%

19%

20%

34%
46%
2007

2010

2012

2014

2016

2018

2020:
BeforeCOVID-19

2020:
Expected impact
of COVID-19

Note: Sums don’t total 100, because results show only the percentage of responses indicating sales growth or decline. The range of possible answers to themultiple-choice questions includes “stable” and “don’t know.”
Base for the 2021 survey is all global respondents (n=2,801).
Source: PwC Family Business Survey 2021

9 | PwC Family Business Survey 2021

Family businesses have proven robust and adaptable—and
as we have come to expect, they are taking a people-first
approach, prioritising the well-being of their employees andsupporting their local communities throughout the crisis.
Eighty percent are enabling staff to work from home, and
25% are repurposing their production to meet pandemicrelated demand.
Despite everything, their 2022 growth ambitions are in linewith what they told us in 2018 (see Figure 2).
This optimism isn’t blind; it’s based on planning andrisk management. Four out of five (82%) are prioritising
diversification and/or expanding into new markets or
products; these are two of the three top priorities forbusinesses over the next two years.

“Back in March, I thought we might lose the company.
We were under-leveraged going into the pandemic andrapidly became over-leveraged. I was encouraged by
the way the entire organisation, including the family,
responded to the crisis, and there was a lot of supportand empathy throughout the business. We ended theyear very confident and optimistic about the future. The
net effect is that the culture bar in our company has risen
significantly. We went through pain together, and that hasbrought us closer.”
Chris Herschend, chairman, Herschend Family Entertainment,
theme park and tourist attraction owner, US

Figure 2: Back to business as usual in 2022
Q: Which of the following best describes your company’s ambitions for 2021 and 2022?
n Grow quickly and aggressively n Grow steadily n Consolidate n Contract/downsize to survive

2021
13%

51%

27%

7%

2022
21%

65%

11%

2%

13%

2%

Comparison: 2018 FBS outlook for next two years
16%

68%

Note: Base is all global respondents (2021: n=2,801; 2018: n=2,817-2,950).
Source: PwC Family Business Survey 2021

10 | PwC Family Business Survey 2021

Sustainability:
Translating ambition
into action

The pressure on all businesses to contributeto a cleaner environment and fairer society is
increasing, so actions around a sustainability
agenda—not just commitments—will takeon a new urgency. In 2017, PwC identified
five urgent challenges facing the world:
wealth disparity, technological disruption,
demographic pressures, polarisation of
opinion and declining trust.8 COVID-19 has
only served to accelerate and intensify these.

8	PwC, ADAPT: Five urgent global issues and implications, May 2020,
https://www.pwc.com/gx/en/issues/adapt.html.

11 | PwC Family Business Survey 2021

Family businesses have a head start to lead on sustainability.
They are the most trusted form of business,9 are potentiallymore agile and are relatively free from short-term market
pressures. And they can have a significant impact. In 2018,
the top 750 family businesses employed more than 30m
people and generated US$9.1tn.10 Non-listed companies(336 of these top 750 are listed, but the majority of familybusinesses worldwide are not) also have the advantage
of being able to take a longer-term view of investment insustainable initiatives. This sets them apart as natural leaders
on sustainability, a role that 55% of respondents to the survey
say they are ready and willing to adopt.
But there is a risk that established approaches and waysof thinking, particularly regarding what sustainability meansand how family businesses are governed, could hold themback. For now, they are not prioritising ESG or sustainable
practices (see Figure 3).

Figure 3: Family businesses say that diversification and improving digital capabilities, not sustainability,
are their top priorities
Q: Which, if any, of the following are the company’s top five priorities for the next two years?
Company priorities by topic (net percentages):n Expansion/diversification (82%) n Digital, innovation, technology (80%) n Evolving/new thinking (65%) n Sustainability/local community (39%) n Other

Expanding into new markets/client segments

55%

Improving digital capabilities

52%

Introducing new products/services

50%

Increasing use of new technologies

49%

Rethinking/changing/adapting the business model

39%

Protecting our core business—covering costs/survival

37%

Pursuing strategic acquisitions or mergers

30%

Increasing investments in innovation and R&D

28%

Increasing NextGen involvement in decision-making/management

24%

Increasing collaboration with other companies

21%

Increasing organisation’s social responsibility

16%

Reducing organisation’s carbon footprint

15%

Reducing dependencies along the value chain

11%

Reimagining our approach to how we measure success

10%

Supporting local community via increased investment/activity

8%Note: Base is all global respondents (2021: n=2,801).
Source: PwC Family Business Survey 2021

9		Sixty-seven percent say family-owned businesses are the most trusted, vs. 58% for public companies. The percentages are based on respondents prioritising which of
the following categories of businesses they trust most: family owned, privately owned, publicly owned and state owned. See Edelman, Edelman Trust Barometer 2020,
19 Jan. 2020, https://cdn2.hubspot.net/hubfs/440941/Trust%20Barometer%202020/2020%20Edelman%20Trust%20Barometer%20Global%20Report.pdf.
10		 David Bain, “The World’s Top 750 Family Businesses Ranking,” Family Capital, 3 Mar. 2020, https://www.famcap.com/the-worlds-750-biggest-family-businesses.

12 | PwC Family Business Survey 2021

This lack of prioritisation is a rare example of familybusinesses being hindered by their independence. Listedcompanies have felt pressure around sustainability from
customers, lenders, shareholders and employees increase
in recent years. Investment in ESG-focused funds rose
fourfold in the US in one year, to more than US$21bn in 2019,and sustainability-related regulation, including emissions
disclosures and gender pay reporting, has proliferated.11
Listed companies have been steadily nudged into ESG
practices and policies. They have no choice but to respond,
and in doing so they are visibly leading the way. For familybusinesses, the opportunity to achieve their top priority—
expanding into new markets—could serve as the impetus toinvest in ESG.

It’s how they think about sustainability that must change.
Sustainability needs to be central to their business
operations, rather than simply embedded within theirphilanthropic activities. In some economies it already is.
Our survey shows that family businesses in countries wheretraditional forms of philanthropy are less practiced havegotten the message. In Asia, for example, family businesses
are embracing sustainability practices by putting them at theheart of what they do. In China, 79% of family businesses
are prioritising sustainability, compared with 23% in the US.
Yet 76% of US family businesses contribute strongly to theircommunity, compared with 54% in China.

Reclaiming the ESG agenda“Sustainability is about being good, not just doing good.”

Giving back is in the DNA of family businesses. They think
about the total impact of their business on society, theyprioritise the well-being of their employees, and they believein supporting their communities and society. More than
80% engage in some form of social responsibility activities,
including 42% that say they engage in philanthropy.

Vimal Shah, chairman, Bidco Africa Group, agribusiness andmanufacturer of fast-moving consumer goods in Kenya, Uganda
and Tanzania

11		Morningstar, Sustainable Funds U.S. Landscape Report, 2020, https://www.morningstar.com/lp/sustainable-funds-landscape-report.

13 | PwC Family Business Survey 2021

ESG is an existential issue. Businesses that don’t
demonstrate their commitment to sustainable practices could
be punished by consumers, the media and even regulators.
Family business owners want, above all, to create an
enduring asset for future generations. Legacy matters—it’s
top of mind for two-thirds (64%) of the respondents in our
survey. If sustainability isn’t a priority, their licence to operate
and their legacy are at risk. And it would appear COVID-19
has increased family business owners’ desire to protect theirbusiness and create a legacy (see Figure 4).

Figure 4: Long-term personal goals for the business
Q: How important to you are the following longer-term goals, i.e., overthe next five years or longer?
The top long-term priorities for family businesses
Protect the business as the most important family asset
82%
76%
Ensure the business stays in the family
65%
61%
Create a legacy
64%
60%
Create dividends for family members
63%
57%
Create employment for other family members
23%
20%
n 2021 n 2018
Note: Base is all global respondents (2021: n=2,801; 2018: n=2,817–2,950).
Source: PwC Family Business Survey 2021

14 | PwC Family Business Survey 2021

The view from thefront line
Ten leaders of family businesses fromAfrica, Asia, Europe, Latin America and the
Middle East, representing ten sectors

Our family business panel representatives agree that there is an undeniable blind spot
when it comes to translating family core values into concrete actions that demonstrate
their commitment to ESG. They regard closing that gap as critical, not only to create newopportunities, but to secure the long-term future of the business. But they also realisethat family business is behind the curve on knowing how to measure sustainability: forexample, how to achieve net zero in carbon emissions or how to communicate progress andcommitment, once achieved.
The panel believes that the next generation’s (NextGen’s) interest in sustainability is important
not only in encouraging family businesses to embrace ESG, but in attracting younger family
members into the business. Purpose and meaning are vital to this generation, and ESG canprovide both.

“If you don’t embed sustainability in everything
you do, you will find yourself out of business,
whatever sector you are in. It’s just a matter ofwhen.”Jakob Haldor Topsøe, chairman,
Haldor Topsøe Holding, chemical technology,
Denmark

15 | PwC Family Business Survey 2021

Peer recommendations
Embed ESG in your business and operating model. The family business leaders on thepanel agree: ESG has gone from a nice feature for a company to have to an imperative forsuccess.
“In the past, ESG was thought about as something we do when everything else was OK,”
says Sara Hughes, president of Lwart Group, an industrial conglomerate in Brazil. “Now
we’re incorporating it into every decision we make.”
The panel identifies many benefits of embedding ESG, from lowering the cost of capital toenhancing brand value.
“When you do good things, good things come to you,” says Ghassan Nuqul, chairman of
Nuqul Group, a conglomerate in Jordan specialising in hygiene products.
Ask for help in measuring and meeting ESG targets. ESG measurement is a nascentdiscipline, and there is no internationally consistent system for reporting ESG progress.
It was only in September 2020 that the World Economic Forum published a framework
for assessing progress on ESG.12 These metrics were welcomed by the family businessleaders on the panel, who are pushing for more measurement and accountability in theirown organisations. Drawing on outside expertise is seen as an important element ofsolving the sustainability puzzle.
“ The stronger word in the boardroom is still the financial word, the return on investment,”
Hughes says. “Intangibles don’t get measured.” ommunicate, communicate, communicate. All panellists stress the importance ofCpublicly talking about both the goals and achievements of the business.
“ Listed companies are better at communicating on ESG because they know where this isheading,” adds Jakob Haldor Topsøe of Haldor Topsøe Holding, a Danish chemical technology
company. “For family businesses, a quiet life has been a good life. That has to change.”Involve the NextGen. Younger generations are the driving force behind sustainability, andin family businesses they are looking for greater responsibility. ESG is a natural fit. Fourthgeneration businesses, for example, are more likely to embed sustainability in decisionmaking (60%, compared with 55% for all respondents) and are more likely to have a welldeveloped sustainability strategy (40% vs. 35%).
“I am first-generation, and we had no choice but to work in the company,” says GünseliÜnlütürk, chair at Turkish fashion brand Jimmy Key. “This current generation can choose
what they want to do. The relationship between the business and generations is getting
looser. The mindset of the elder generations should change and should be adapted toyoung generations’ mindset.” ncourage board diversity. The panel believes that a lack of pressure from capitalEmarkets could be a handicap for family businesses when it comes to ESG. They feel thata diverse board, with independent input, could act as a good proxy and challenge thinking
around sustainability.
12		World Economic Forum, Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value
Creation, 22 Sept. 2020, https://www.weforum.org/reports/measuring-stakeholder-capitalism-towards-common-metrics-and-consistent-reporting-of-sustainable-value-creation.

16 | PwC Family Business Survey 2021

How to get your sustainability agenda started
Here are four areas to consider to help embed ESG into your business operations and toengage with both the NextGen and your board in the process.
•	Measure the total impact of ESG actions. PwC has created a Total Impact Measurement andManagement13 framework to help companies develop the capabilities to act on ESG goals
and make better-informed business decisions.
•	Follow best practices on non-financial reporting. The World Economic Forum recently
published its Measuring Stakeholder Capitalism report, which describes a set of universal
metrics under four pillars: people, planet, prosperity and principles of governance.14•	Your family is unique, and so are your children. Take a short quiz to find out which NextGen
path they may be on, and explore case studies and tailored recommendations for theincumbent generation and next generation.15•	Consider shaking up the board composition. A more diverse board that is not comprised offamily or friends of family will help challenge thinking.16“In the past, we’ve never talked about [our positive impact],
because if you do, you’re seen as boasting. That’s a mindset
change that has to come.”
R. Dinesh, managing director, TVS Supply Chain Solutions
Limited, logistics, India

13		PwC, Total Impact Measurement and Management, accessed in Jan. 2021, https://www.pwc.com/gx/en/services/sustainability/
total-impact-measurement-management.html.
14		World Economic Forum news release, “Measuring Stakeholder Capitalism: Top Global Companies Take Action on Universal
ESG Reporting,” 22 Sept. 2020, https://www.weforum.org/press/2020/09/measuring-stakeholder-capitalism-top-global-companies-take-action-on-universal-esg-reporting/.
15		 PwC, Global NextGen Survey 2019, 2019, https://www.pwc.com/gx/en/services/family-business/nextgen-survey.html.
16		Jared Landaw (Barington Capital Group LP), “Maximizing the Benefits of Board Diversity: Lessons Learned From Activist Investing,” Harvard Law School Forum on Corporate Governance, 14 July 2020, https://corpgov.law.harvard.edu/2020/07/14/
maximizing-the-benefits-of-board-diversity-lessons-learned-from-activist-investing/.

17 | PwC Family Business Survey 2021

Still behindthe digital curve

The pandemic demolished any lingering
doubts about the benefits of digitaltransformation. Digitalised services became
the norm overnight, and businesses withestablished digital capabilities fared better
than those that had to scramble to keep up.
This was true for family businesses, as well.
Those with strong digital capabilities andaccess to good data performed better thanothers (see Figure 5).

18 | PwC Family Business Survey 2021

But these businesses are the minority. Although four outof five (80%) say that initiatives related to digitalisation,
innovation and technology are a top priority, progress in theseareas has been slow. Only 19% say that their digital journey
is complete, and 62% believe they have a long way to go. In
our 2018 Family Business Survey, 80% of respondents wereconcerned about innovation and technology. And although
they name digital capabilities as their second highest priority,
29% still report in the 2021 survey that they don’t have strong
digital capabilities and that developing these capabilities is
not high on their action agenda.

40% of third- or fourthgeneration businesses describe
themselves as digitally strong

Our message: Now is the time to act.
The experience of family businesses that have upgraded theirdigital capabilities shows the vital importance of a clear road
map. The actual advantages of digitalisation don’t always
match up to the assumed ones, so planning is key. For
example, 58% of digitally strong businesses use technology
to improve their compliance and reporting function, but only
44% of those planning a digital upgrade see this as a priority.
This needs to change.

The survey also found that NextGens have a greater role in
46% of digitally strong businesses, though digitalisation,
innovation and technology (as well as sustainability) are moreof a priority for third- and fourth-generation businesses.

Figure 5: Strong digital capabilities translate into strong business performance
Better performance
60% of family businesses with strong digital capabilities saw growth pre-COVID(vs. 51% for other family businesses)
32% expect growth after COVID impact (vs. 26%)
71% expect to grow in 2021 (vs. 61%), and 88% expect to grow in 2022 (vs. 85%)
Increased agility
86% of family businesses with strong digital capabilities have access to reliable andtimely information/data that feeds into the decision-making (vs. 54% for other familybusinesses)
71% have the ability to change course at short notice due to liquidity (vs. 50%)More focus on sustainability
60% of family businesses with strong digital capabilities ensure sustainability is at theheart of everything they do (vs. 42% for other family businesses)
51% have a developed and communicated sustainability strategy that informs all theirdecisions (vs. 29%)
More transparency
73% of family businesses with strong digital capabilities say information is sharedin a transparent and timely way between family members (vs. 58% for other familybusinesses)

Note: Base is all global respondents (2021: n=2,801).
Source: Pwc Family Business Survey 2021

19 | PwC Family Business Survey 2021

The view from thefront line
Eight leaders of family businesses
from Asia, Europe, Latin America andNorth America, representing six sectors

Our panel confirms that those businesses with good digital capabilities found transitioning
their employees to remote work easier. The agility of family businesses is apparent in the rapid
adaptations that many made to their business model or operations. Intergenerational tension
surrounding digital transformation also strikes a chord.

“We had tried for two years before the pandemic toapply virus-killing technology to our tissue manufacturing
process without success. But when the pandemic hit,
we thought about how we could use the technology, andwithin eight days we had designed a mask, imported thefabric and started manufacturing masks. Today, masks
have become one of our new wellness core businesses.”
Ghassan Nuqul, chairman, Nuqul Group, a hygiene productconglomerate, Jordan“Digitalisation is not a goal you can reach; it’s a constantjourney. The current pandemic shows us the power ofdigital technologies when we deploy them the right way—with a clear focus on creating value for customers andemployees.”
Burkhard Eling, CEO, Dachser Group, logistics, Germany

20 | PwC Family Business Survey 2021

Peer recommendations
Rediscover your entrepreneurial flair. The pandemic has been an essential reminder ofthe potential of family businesses, particularly regarding the possibilities and opportunities
stemming from technology.
Gabriela Baumgart, who is on the board of industrial conglomerate Grupo Baumgart in
Brazil, describes the pandemic as “a reset” for many family businesses. “This is a new era
for family businesses. In the past, many have tended to avoid risk and have been quite
conservative. That has changed. It’s an opportunity to review business models and see if
the governance is being effective. They are remembering how to be entrepreneurial again,
adapting and creating value in a challenging world.”
Digital transformation and agility go hand in hand. Digital technology helped firms pivot
their operations quickly.
“One of our businesses, Daba, is an exclusive distributor of Nespresso in Spain andseveral African countries. Before the pandemic, we sold mainly through our shops; only
about 10% of sales were online,” says Alfonso Líbano Daurella, vice chair of Cobega
Group, which has global operations in soft drink distribution. “We shifted the businessmodel when the pandemic hit so that around 80% of sales were online and our shops
delivered the coffee locally to customers. We moved from being a retail business to aninternet delivery business in just four months. That’s the mentality you need during acrisis—don’t close the shops, change.”
Allow the next generation to challenge priorities. As mentioned above, NextGen
members are an important motivating force for digitalisation. Our 2019 NextGen Survey
found that younger family members saw technology as one of the three most importantdrivers of change for the business, and 64% of them felt this was the area in which they
could add value.17
Nina Østergaard Borris, daughter of Torben Østergaard-Nielsen, the owner of Danish
shipping company USTC, was appointed COO of the group in 2020 at age 36. She saysthat different generational priorities were apparent when the business recently went
through “the long process of deciding what we wanted to be known for. I am more awareof the agenda around digitalisation and ESG, but my father is good at listening and asking
the critical questions. It’s been a good experience. As a NextGen, you have to be mindful
not to throw out the good things because you are focused on something new. My father
has valuable experience; I have a more forward-looking mindset.”17		 PwC, Global NextGen Survey 2019, 2019, https://www.pwc.com/gx/en/services/family-business/nextgen-survey.html.

21 | PwC Family Business Survey 2021

How to make your digital transformation
move fasterMoving faster along a digital journey requires an understanding of the value of data andanalytic tools, as well as a commitment to upskilling your workforce. You should also
recognise that transformation must be a part of a cultural shift that is supported by highly
engaged leaders. Start this process by asking the right questions:•	How can I make faster and better decisions by optimising my data assets?18•	Do I understand the critical success factors for transforming my business?19•	Is my workforce ready for the future?20

18		 PwC, Data and analytics, accessed in Jan. 2021, https://www.pwc.com/gx/en/issues/data-and-analytics.html.
19		Al Kent, David Lancefield and Kevin Reilly, “The four building blocks of transformation,” strategy+business, 22 Oct. 2018,https://www.strategy-business.com/article/The-Four-Building-Blocks-of-Transformation?gko=aa2b7.
20		PwC, New world. New skills. Accessed in Jan. 2021, https://www.pwc.com/us/en/services/consulting/workforce-of-the-future/new-world-new-skills.html.

22 | PwC Family Business Survey 2021

Family dynamics:
Holding up a mirror

Family businesses are complex, given the nature of the personal
relationships on which they are built. The same relationships thatallow the business to act and adapt quickly can also slow down
its decisions and hold it back—and it can be difficult to admit that
communication between family members and across generations
is not what it could be. Almost seven out of ten survey respondents(68%) say that family members who are not on the board trust thefamily members who are on the board, but the evidence hints atunderlying discord: only 58% say that all family members sharesimilar views about the company’s direction.

23 | PwC Family Business Survey 2021

There are many sensitive issues to discuss and many
areas in which progress is falling short (see Figure 6).
Two-thirds (66%) of respondents report that family members
communicate regularly about the business, but one-fifth(21%) say they have no formal mechanisms in place to deal
with potential areas of disagreement.
Family harmony should never be taken for granted. It needs
work and planning, and it should be approached with thesame focus and professionalism that’s applied to businessstrategy and operational decisions. Seventy-nine percent
of family businesses have some form of governance policy
or procedure in place—down from 84% when we asked
the same question in 2018—but for many, there are
significant gaps.
Conflict is inevitable. Only one in four respondents (23%) say
they have never had a disagreement. At the other extreme,disagreements are a regular occurrence for one in ten (7%).
Dealing with disagreement is very much a private affair; 80%

66% of family businesses
say family members
communicate regularly about
the businessof respondents who report having disagreements deal withthem internally. But just 13% have an established conflict
resolution system, and only 12% have used an external thirdparty resolution service.
Succession planning is one of the most sensitive issues,
and COVID-19 appears to have concentrated minds in thisarea. The survey confirms an uptick in business planning forsuccession: 30% of family businesses now have a formal
succession plan, up from 15% in 2018.

Figure 6: Family values matter, but only half have put them in writing, and less than half have codified governance policies
Q: How strongly do you agree or disagree that…

Q: Which of the following policies and procedures, if any, do you havein place?

The family have a clear sense of agreed values and purpose as a company

Shareholders agreement

68%

47%

79%

56%

The family have a documented vision and purpose statement(mission) for the company

Testament/last will

51%

34%

68%

42%

The family have a defined code of conduct

Emergency and contingency procedures

47%

19%

66%

36%

The family have the family values and mission for the company
articulated in written form

Entry and exit provision

44%

18%

49%

35%

n 2021 n 2018
Note: Base is all global respondents (2021: n=2,801; 2018: n=2,817–2,950).
Source: Pwc Family Business Survey 2021

Conflict resolution mechanisms
15%30%
n 2021 n 2018
Note: Base is all global respondents (2021: n=2,801; 2018: n=2,948–2,951).
Source: Pwc Family Business Survey 2021

24 | PwC Family Business Survey 2021

Values are a NextGen magnet
In 2018, about one-quarter (23%) of family businesses
expected that NextGen family members would be majority
shareholders within five years. In the 2021 survey, this number
rises to just over one-third (35%). Younger generations arestrongly motivated by meaning and purpose when it comesto their career, and sometimes struggle to find these qualities
in the family business, according to conversations we have
had with many NextGens. Clear company values can help tobridge the generational gap and give the NextGen that senseof purpose they crave. Family businesses with values in a
written form are also better prepared for succession and are
more communicative and transparent. And they performed
better than their peers during the pandemic, too (see Figure7). Though 70% of businesses say the family has a clear set ofvalues, only 44% have written them down.

Figure 7: Written values correlate strongly with success
Better performance
58% of family businesses with values in a written form saw growth pre-COVID (vs. 52%
for other family businesses)
32% expect growth after COVID impact (vs. 25%)
69% expect to grow in 2021 (vs. 61%), and 89% expect to grow in 2022 (vs. 83%)

More transparency
77% of family businesses with values in a written form say information is shared in atransparent and timely way between family members (vs. 54% for other family businesses)
77% say family members regularly communicate about the business (vs. 57%) and weremore communicative during the pandemic (62% vs. 46%)69% say family members have similar views/priorities about company’s direction (vs. 49%)
More supportive of staff, suppliers and the community
54% of family businesses with values in a written form provided emotional/mental
health support to staff (vs. 39% for other family businesses)
18% supported suppliers by making non-critical orders (vs. 12%)46% took action to support their local community (vs. 34%)

Better prepared for succession
41% of family businesses with values in a written form have a robust, documented andcommunicated succession plan in place (vs. 20% for other family businesses)
13% have a succession plan that has been revised in light of COVID (vs. 5%)

Note: Base is all global respondents (2021: n=2,801).
Source: PwC Family Business Survey 2021

25 | PwC Family Business Survey 2021

The view from thefront line
Eight leaders of family businesses
from Asia, Europe, Latin America andNorth America, from seven sectors

Our panel agrees wholeheartedly that family dynamics are a sensitive issue. Topics suchas succession can be emotional, which makes them difficult to navigate and, as a result,
tempting to avoid—though succession is also the only area of family governance in whichconcrete actions increased since the 2018 survey. Many families want to keep discussionof these sensitive issues among themselves, but they agree that they often needprofessional support and moderation to address them properly. Finding such support
can help professionalise the business and encourage families to reconsider the role,
responsibilities, and composition of the board and management.

“Many family business owners spend a lot of time on thebusiness but much less time on family issues. Often the
feeling is that they have no problems, so there is no reason
to make time to discuss family issues. But if you don’t spend
time on this, or only do so when a conflict arises, then it’s
too late.”
Farhad Forbes, co-chairman, Forbes Marshall, engineering,
India, and chairman of Family Business Network International

26 | PwC Family Business Survey 2021

Peer recommendations
Professionalise family governance. Having a professional governance structure anda clear process for conflict resolution, preferably involving an independent party, makes
business sense, particularly for family businesses. A professional approach strips emotion
and personal bias, common stumbling blocks for families, out of decisions.
“If you are planning to sell a new product, you sit down and work out the business case.
You invest time into the issue. I don’t see family harmony as any different. Take advice andbuild in protocols for the future,” says Alfonso Urrea Martin, CEO of the tools division of
Mexican industrial manufacturer Grupo Urrea.
Governance should reflect that families are dynamic. Family businesses need torevisit governance structures regularly, because the structure of ownership can change
as NextGens enter the business or through marriages. Therefore, it is important to set out
parameters in a family constitution and keep them current.
“We rewrote the constitution eight years ago and will rewrite it again soon,” says
Ajay Shriram, chairman and senior managing director of DCM Shriram Group, an Indian
conglomerate. “People get married, dynamics change. We involved our mother andteenage nieces, who aren’t working in the business, because the reality is that all family
members have an influence, and you have to be ready for that.”
Write values down. A written accounting of a family business’s values helps with
communications and transitions.
Bernhard Simon, third-generation CEO of the German logistics company Dachser Group,
handed over the reins to new CEO Burkhard Eling, who isn’t a family member, on 1 Jan.
2021. In planning the transition, the family went through the process of writing out thecompany’s values. “My aunt and mother gave us, the third-gen family members, thefreedom to ask the question, ‘Do we want to remain as shareholders or sell the business?’”
Simon says. “It’s the only way to become aware of why we wanted to still be a familyheld company. Going through that process meant we were able to write down the values
we were living with, and they lead the decisions we make. Every executive that joins thecompany, Burkhard included, has to sign up to the values as part of their contract.”“I see the written values as a gift,” Eling says. “They act as glue between the family,
executive board and management board. I don’t feel hindered by them, because theygive me a clear understanding of where the strategy needs to lead the company in asustainable way. Values need to be the common ground on which a company is built.”
Allow external help. Conflict and differences of opinion are inevitable—we’re only human.
But the emotions involved in family discussions can be difficult to resolve internally. Manyon the panel see the benefit of involving a neutral, outside perspective.
“External resources have helped us a lot. We are three brothers, and we took the view thatthe key was communication, communication, communication,” Shriram says. “We haveworked with a behavioural scientist since 1996; the three of us go to a retreat every year
for four days and just talk. We unburden ourselves and get any conflicts out of our minds.
It’s a very powerful opportunity to open up.”27 | PwC Family Business Survey 2021

How to start addressing family governanceFamily dynamics are always an emotional issue, but one that, when addressed, can leadto significantly stronger outcomes. Here are some initial steps to help ensure good working
relationships within a family business.
•	Join a network that offers peer-to-peer learning and helps family business owners identify
trusted advisers. Such networks operate through regional and international organisations,
including the Family Business Network International and PwC’s Family Owners Network.
•	Regularly revise your family governance provisions based on best practice targets.
PwC’s Owners Agenda, for example, creates a practical framework to help prioritise
actions.21•	Develop well-planned family leadership summits that engage with the next generation.
This is a tried-and-true practice that can engage NextGens and provide career path
guidelines.22•	Review your board composition.23“In 2018, we involved the fourth generation in discussing
our family values, and we added some new ones to ourvalues as a result. New generations are more purpose-driven.
They want more of a work–life balance. They focus even moreon the business’s total impact, on ESG, and sustainability, in
addition to looking at the financial and cultural results.”
Gabriela Baumgart, board member, Grupo Baumgart, industrial
conglomerate Brazil

21		 PwC, Family business services, accessed in Jan. 2021, https://www.pwc.com/gx/en/services/family-business.html.
22		Bob Frisch and Cary Greene, “Leadership Summits That Work,” Harvard Business Review, Mar. 2015, https://hbr.
org/2015/03/leadership-summits-that-work.
23		Beatrice Ballini, “Every Family Business Needs an Independent Director,” Harvard Business Review, 27 Jan. 2020, https://hbr.org/2020/01/every-family-business-needs-an-independent-director.

28 | PwC Family Business Survey 2021

Redefining the formula forfamily business success

For family businesses, there is good news in these survey findings but also a wake-up call.
Their financial resilience makes family businesses well-placed to succeed, but they need toreadjust both their mirror on society and on themselves. If they can accomplish that, theirpower to fuel the post–COVID-19 recovery grows even more important because of theirfinancial impact around the world. To retain their licence to operate, they will need to revisit
their purpose and use the trust they have gained to create measurable non-financial impact.
The NextGen family members will play a vital role in pushing family businesses forward inpolicy areas that are essential to the company’s legacy. Our final conclusions focus on thethree key areas in which immediate actions will help secure a lasting formula for success forthe generations to come.
Deliver on ESG. Family businesses have a richly deserved reputation for prioritising thewelfare of their employees and the communities in which they operate. But they are also
at risk of losing control of the narrative, and larger, listed companies are claiming the ESG
agenda for themselves. Family businesses need to learn how to measure and communicate
their ESG agenda to a wider stakeholder group.
Transform digital capabilities. Over many years, our survey has shown there is more talkabout digitalisation than action. The shocks of COVID-19 reveal that those that had alreadyembarked on their digital journey were better placed during the crisis. Now is the time toact. The 29% of respondents who are not making digitalisation a priority and have not madeprogress will face significant challenges in protecting their legacy.
Professionalise family governance. We saw in the 2018 survey that success came whenfamilies improved their internal governance by adopting more businesslike practices. Families’
sense of purpose must be shifted to the business operations for continued success. Codifying
values helps with both performance and family communications.

29 | PwC Family Business Survey 2021

Methodology
About the Family Business Survey
The Family Business Survey is a global market survey of owners and executives. The yearly turnover of participatingcompanies ranges from under US$5m to more than US$6bn. The goal of the survey is to get an understanding of what familybusinesses are thinking on the key issues of the day. All results were analysed by Jigsaw Research.

2,801 online surveys conducted in 87 territories
between 5 Oct. and 11 Dec. 2020

Europe1061
Middle East

73
Africa231
North America

205

Latin America

413
Asia-PacificNote: Sum of surveys doesn’t total to 2,801, because one respondent was unable to select a territory.
Source: PwC Family Business Survey 2021817

30 | PwC Family Business Survey 2021

Acknowledgements
We would like to thank the 2,801 family business owners and leaders who generously gave their time to respond to our survey.

Family business panel participants
In December 2020, we brought together 24 family business owners from 18 countries in diverse sectors for three different
virtual meetings to help us interpret the key survey findings and provide insights and recommendations. Their input helped
shape the content and recommendations in the “View from the front line” sections. We would like to extend our thanks to:

Gabriela Baumgart, Grupo Baumgart, Brazil
Hans-Jacob Bonnier, Bonnier, Sweden
R. Dinesh, TVS Supply Chain Solutions Limited, India
Burkhard Eling, Dachser Group, Germany
Farhad Forbes, Forbes Marshall, India
Matteo Fumagalli Romario, Gruppo Sol, Italy
Philipp Gutsche, CCBA Group, South Africa
Jakob Haldor Topsøe, Haldor Topsøe Holding, Denmark
Chris Herschend, Herschend Family Entertainment, United States
Sara Hughes, Lwart Group, Brazil
Fabian Kracht, PERI Group, Germany
Sophie Lammerant Velge, Bekaert/FBN Belgium, Belgium
Alfonso Líbano Daurella, Cobega Group, Spain
Marjo Miettinen, Ensto, Finland
Ghassan Nuqul, Nuqul Group, Jordan
Nina Østergaard Borris, United Shipping & Trading Company (USTC)/Selfinvest, Denmark
Nicholas Oughtred, William Jackson Food Group, United Kingdom
Hind Seddiqi, Seddiqi Holding, United Arab Emirates
Vimal Shah, Bidco Africa Group, Kenya
Ajay Shriram, DCM Shriram Group, India
Bernhard Simon, Dachser Group, Germany
Günseli Ünlütürk, Jimmy Key, Turkey
Alfonso Urrea Martin, Grupo Urrea, Mexico
Risto Väyrynen, World Economic Forum Family Business Community, Finland/Global

31 | PwC Family Business Survey 2021

PwC Family Business Survey steeringcommittee
We are indebted to the direction and insight of:Peter Bartels, Global Entrepreneurial and Private Business
Leader, Partner, PwC GermanyPeter Englisch, Global Family Business and EMEA
Entrepreneurial and Private Business Leader, Partner, PwC
Germany
Jonathan Flack, US Family Enterprises and Business Leader,Partner, PwC US

We would like to acknowledge the contributions of thealmost 100 PwC colleagues who have supported us inengaging family business owners in their territories andencouraging them to take the survey. Their commitment,
networks and dedication were critical in the success of
this project.

Report production
We would like to thank the following for theircontributions:James Flack, Sara McKee and Ann Morgan, Jigsaw Research

Ng Siew Quan, Asia-Pacific Entrepreneurial and Private
Business Leader, Partner, PwC Singapore

Farhad Forbes and Alexis Du Roy de Blicquy, FBNInternational

Dominik von Au, Managing Director of INTES Family BusinessAcademy and Family Governance Leader, Partner, PwC
Germany

Liz Fisher, report writer

Hannah Harris, UK Family Business Leader, Director, PwC UK

PwC Global Family Business Survey 2021
core team:

PwC Advisory Board
We also wish to thank the PwC Family Businesspractitioners from across the network who helped us toshape the findings in this report. We are grateful to:
Amélie Wattel, PwC France
Amin Nasser, PwC Middle East
Bill McLean, PwC Canada
Carlos Mendonca, PwC Brazil

Court Three Graphic Design Consultants

Peter Englisch, Global Family Business and EMEA
Entrepreneurial and Private Business Leader, PwC Germany
Francesca Ambrosini, Family Business Clients Programmes
Lead, Global Entrepreneurial and Private Business, PwC UK
Brittany Metrebian, Global Marketing, PwC UK
Deborah Unger, Global Marketing, PwC UK
Romina Perchthaler, Global Marketing, PwC UK

Federico Mussi, PwC Italy

Cydnee Griffin, Global Entrepreneurial and Private Business,
PwC US

Gert Allen, PwC South Africa

Spencer Herbst, Global Marketing, PwC US

John CW Wong, PwC Hong Kong

Christina Müller, Family Business, PwC Germany

Karina Hejlesen Jensen, PwC Denmark

David Bowden, Global Communications, PwC UK

Maria Victoria Sanchíz, PwC Spain

James Morris, Global Communications, PwC UK

Norbert Kuehnis, PwC Switzerland

Lou Gabriel, Global Digital, PwC US

N. V. Sivakumar, PwC India

Niall Anderson-Brown, Global Digital, PwC UK

Piotr Michalczyk, PwC Poland32 | PwC Family Business Survey 2021

PwC Network key contacts
Peter Bartels

Peter EnglischGlobal Entrepreneurial
and Private Business Leader
Partner, PwC Germany
peter.bartels@pwc.com+49 40 63782170

Global Family Businessand EMEA Entrepreneurial
and Private Business Leader
Partner, PwC Germany
peter.englisch@pwc.com+49 201 4381812

Carlos Mendonca

Bill McLean

Family Business Leader
Partner, PwC Brazil
carlos.mendonca@pwc.com+55 11 3674 3343

Family Enterprises
and Business Leader
Partner, PwC Canada
bill.mclean@pwc.com+1 416 869 2323

N. V. Sivakumar

Adnan Zaidi

Entrepreneurial and Private
Business Leader
Partner, PwC Indian.v.sivakumar@pwc.com+91 98450 30010

Entrepreneurial andPrivate Business Leader
Partner, PwC Middle Eastadnan.zaidi@pwc.com+971 56 682 0630

Ng Siew Quan

Jonathan Flack

Asia-Pacific Entrepreneurial
and Private Business Leader
Partner, PwC Singapore
siew.quan.ng@pwc.com+65 6236 3818

Family Enterprises
and Business Leader
Partner, PwC US
jonathan.flack@pwc.com+1 615 975 2026

Gert Allen

Brittney B. Saks

Entrepreneurial andPrivate Business Leader
Partner, PwC South Africa
gert.allen@pwc.com+27 11 797 6101

Global Private Wealth Leader
Partner, PwC US
brittney.b.saks@pwc.com+1 773 610 0189

pwc.com/fambizsurvey

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