Executives in Science, Business and Society 3

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PAGE 8 CRACKING THE CODE ON WEALTH PRESERVATION: IT IS NOT ABOUT MONEYDR. MAARTEN DE GROOT VRIJE UNIVERSITEIT AMSTERDAM
key perspectives IN SCIENCE, BUSINESS AND SOCIETY The wealthy are heavily criticised and often find themselves the focus of discussion, debate, and controversy. In recent years, the public narrative on this topic has become deeply polarised. Research has shown that wealthy people derive most of their wealth from active ownership of family enterprises and are different from the stereotypical rich and famous as featured in popular lists. In effect, enterprise families have a major impact on our society, contributing significantly to global economic growth, employment, philanthropic capital, startup finance, technological innovation and even the performance of capital markets. Moreover, those families with a transgenerational orientation are likely to contribute even more to society and the economy. Given the public debate and the importance of such families to the economy, it seems counterintuitive that, in the field of family business research, where the family is the crucial variable, theoretically distinguishing family businesses from other firms, the literature has so far neglected the family itself as a constituent determinant, and has instead focused overwhelmingly on the business system. LESS THAN 15% OF THE FAMILIES IN THE FORBES 400 WERE STILL LISTED ONE GENERATION LATER. In my dissertation, I set out to study wealth preservation in enterprise families that share ownership of multiple assets (e.g., investments, real estate) and multiple entities (e.g., family businesses, family offices and/or family philanthropic foundations) across generations. I explore why so many enterprise families fail to secure transgenerational monetary prosperity. Several theoretical perspectives have contributed to our understanding of family business and wealth creation through business venturing. However, very little is known about how enterprise families preserve wealth, and, in particular, what happens at the familial level. MY RESEARCH LIFTS THE VEIL ON A HIGHLY SECRETIVE UNIT OF ANALYSIS. To explore this in more detail, I first conducted a conceptual, theoretical study from which three clear concepts emerged: family governance (how families make decisions together); family social capital (relationships and cohesion); and a nascent topic, the family office (an entity with the goal of wealth preservation). I subsequently opened a theoretical black box by conducting a qualitative exploratory study to investigate the origins of family social capital. My multi-case study focused on seven enterprise families with legacies going back more than 100 years - families with up to 300 members and assets worth billions of dollars. Next, I tested my findings with a quantitative empirical study and a moderated mediation framework. I contacted 1,020 global enterprise families and worked with 175 of them. The oldest family enterprise dates back to the early 1700s, and the largest spans 12 branches and has more than 1,000 members. Gathering data was difficult (access), intrusive (privacy) and costly (travel). My 25-year experience as a strategist, board member, and CEO in the wealth management sector and my present positions as the CEO of a family office and co-chair of a global research institute enabled me to gain access to these families. REGARDLESS OF COUNTRY, TAX LAWS, OR ECONOMIC CYCLE, 70% OF THE FAMILY ENTERPRISES FAIL. Regarding the issue of how enterprise families can preserve their wealth for multiple generations, this research makes three main theoretical contributions. First, my dissertation contributes to family business research by shifting the analysis from the family business to the family itself. Second, I theorise that collective family action towards wealth preservation is reinforced by effective family governance, substantial familial social capital and a family-office emphasis on non-financial services. Third, this research helps to unpack the black box of the origins of relationships within families and the role of family governance in social capital. WEALTH PRESERVATION COMES WITH A DIFFERENT SET OF CHALLENGES THAN GROWING A FAMILY BUSINESS. Based on these theoretical contributions, this dissertation also has several practical implications. Enterprise family wealth preservation requires collective action and, therefore, breakdowns in trust must be avoided. My findings emphasise the fact that enterprise families should develop strong decisionmaking capabilities and establish effective mechanisms for family governance. In addition, these families should develop high-quality family learning programmes to prepare the rising generation for their PAGE 9 ABRI - Amsterdam Business Research Institute
Page 1 and 2: EXECUTIVES IN SCIENCE, BUSINESS AND
Page 3 and 4: 36 TRANSFER OF TRAINING: The Achill
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Page 11 and 12: 21 19 16 12 Marilieke Engbers HOW D
Page 13 and 14: DR. MARILIEKE ENGBERS VRIJE UNIVERS
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