Report on a meeting of the Family Business Network

The 11th study session of the "Family Business Network," one of the networks for graduates of NUCB  Business School, was held on November 25 at the Tokyo School with 17 participants.
The facilitator for this study session was Hirofumi Mori, who completed the EMBA program at the Osaka School in September 2023, and the participants discussed the dispersion of shares due to inheritance in a long-established family business founded in 1920, and the resulting distance between family shareholders and the company under the theme of "Family Business: Anguish and Choices of the Founding Family. The discussion focused on the dispersion of shares due to inheritance and the resulting distance between family shareholders and the company.

In the case, the main character is wondering whether he should consolidate the shares dispersed to the fifth generation or accept the dispersion and pursue the next growth strategy through listing or M&A? We are wondering whether this is the right thing to do. In addition to this, we feel the need for a different kind of communication regarding the relationship with the branch family, which has traditionally had a sasagake president personnel system.

From the members,

• At this point, we should aim for separation of ownership and management by means of listing or a holding company system.
• The risk that the management foundation will collapse if family shareholders, with whom the relationship has become weak, give up their shares (or act for capital gains).
• Huge amounts of money are needed to consolidate all shares in the company, which is not realistic.
• The company should consolidate to maintain at least a majority (preferably more than two-thirds) of the shares.
• As a long-established company with deep roots in the local community, management should place more importance on the relationship with the community than on the power of the company's shares.
• Need for regular communication with family members holding shares

Opinions from these viewpoints were exchanged.

After the discussion, we heard an episode in which the main character (Mr. Mori) had a knee-to-knee meeting with all the shareholders and succeeded in consolidating the shares of the main family side.

It was a case that made us feel that this was the result of the manager's (Mr. Mori's) determination (his commitment to the company's business) being conveyed to the diluted family shareholders and the branch shareholders.

About the Family Business Network

Not only family businesses, but also alumni, current students, and faculty of NUCB Business School who are interested in various matters related to business succession, will hold a proactive study session, with everyone viewing it as their own management issue.