Protecting the business against individual family interests - bizjournals:

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In the minds of many if nobody in the family is able or willing to take over running the company, the only options are to sell it or shut it But maybe not. A number of senioe owners of family companies who find themselves withoug a successor in the younger generatioh come up with ways to keep business ownership in the even if the management has to go Think about the Midwestern family that has ownef and operated a chain of small market newspapers for more than 160 Thefamily – we’ll call them the Smiths – has had very few internalp business disputes, and no one has ever elected to cash out of the In addition, there’s usually been a placre in the business for any qualified and committed familyt member who applied.
How have they managed that? Well, about 120 yearws ago, the widow of the founder’s son found herself the sole ownere of the growing andsuccessful business. She was decidedly unimpresser with thenext generation’s pool of managemenf talent, including her own children. She also heard some rumblings aboutf splitting up the company so that everyone who wantecd his own newspaper coulfhave it. Not a chance, said the gritty lady, and she put the whole kit and kaboodle into a She made a provision that if the trusr wereever broken, the compangy would have to be sold out of the family with the proceeds going to charity.
And if that wasn’t enoughu to scorch some bonnets, she also insistec that all future CEO’s be hired by the trustees and that nary a one of them be afamilhy member. A few featherd were ruffled atthe time, but today the Smithss have a very profitable and satisfying familty business. Another family in business – call them the Johnsonds – reached the end of their successorf string with the second generation offamilyg owners. Instead of calling it quitsx and selling theirmanufacturing company, the shareholding memberz of the family agreecd to bring in professional They conducted a global search and hire an experienced senior executivwe as president.
The Johnsonn family retained their representation on the boarr and a coupleof upper-level management jobs, but they let theird new CEO staff the executive suite with qualified peoplre he could work with effectively. And they provided compensation packagea for their outside executives that equaled the industry standarf andthen some. The Johnsons will continue to own their confident that although management is out ofthe family’sw hands, it’s in good hands.