EFB Summit 2018



Main discussions from European Family Businesses Summit

On 6th of November 2018, Transeo was present at the 5th European Family Businesses Summit in Brussels.

Within the many discussed topics, three of them mainly interested Transeo:

1) Role of the EU policies

In order to harmonize and sustain family businesses in Europe, incentives and guidelines need to be conducted by the European Union, in terms of economy, legal and fiscal matters.

The EU expressed its readiness to participate to certain programmes along with the Member States, because many responsibilities remain a Member State issue, such as the Education.

Members States also have a role in terms of use of European funds. Currently, they are widely used to address short term matters. The European Union then considers that a long-term strategic reflection about the investment of European funds is needed, in order to get results in the following years.

2) Transfer to future generations

In addition to the arrival to the pension of the "Baby boomers", transfer to the future generation should be speeded up by the current society issues, such as environmental, social, ethical and economic matters.

Three main trends of the new generations were highlighted:

 

  • Fresh air on vision and strategy: change in hierarchical structure, acceptance of the change, detachment of day-to-day management and integration of societal issues in a long-term vision ...
  • New perception of governance
  • Use of digitalization

 

3) Future and challenges of family businesses

More than half of family business owners plan to transfer their business to the next generation.

Out of the 12% who are considering a transfer in the next 3 years, 88% think they will transfer it to a third party, which would require the intervention of transmission specialists.

In terms of challenges, 3 topics were highlighted:

 

  • The financing of family businesses is not to their advantage. Equity financing is disadvantageous because it is taxed on profit and dividends, which encourages companies to borrow more from the bank. This is dangerous because if there is a crisis, companies will not have enough equity and will not be able to repay the banks.
  • The intrafamilial transmission of the first generation is the most complicated.
  • The difficulty to attract young talents. Smoother organizations (cooperatives, social economy enterprises, etc.) have more opportunities to attract young people because they are interested in societal problems that interest young people more than money.