The value of family businesses in the Italian economic environment

In this context, ensuring the perfect balance between the parties is the most difficult, but at the same time the most stimulating challenge.

This is what emerges from the data of the 14th AUB Observatory, sponsored by AIDAF, (Italian Association of Family Businesses), AIDAF-EY Chair of Family Business Strategy at Bocconi University, UniCredit and Cordusio and Angelini Foundation. The study, presented last January, surveys the balance sheets of Italy's 11,635 family businesses with revenues over 20 million euros, representing 65 percent of Italian firms.

Among the most significant findings is that the structure and governance models of family businesses have enabled them to respond effectively to the economic difficulties caused by the challenges of recent years. In fact, the success of family businesses, in addition to being defined by profits, also stems from objectives that are not strictly financial: control, transgenerational succession, social and human capital, and the emotional bond with the company and its reputation. This explains why, having overcome the first impact with the emergency, these kinds of businesses have joined their efforts to implement long-term strategies, protect the purpose and the socio-emotional value that the family derives from owning the business. Indeed, data from the AUB Observatory reveal how the average strength of all Italian family businesses has improved by more than 20 percent since 2019: the debt ratio (total assets/equity) has dropped from 5 to 4 times. It also turns out that these kinds of businesses create more employment, grow faster than others, and have lower debts.

Regarding the governance analysis, it appears that there is more openness in the BoD to the inclusion of non-family leaders and board members (at least 1 non-family member).

One of the critical aspects of the Report is the higher age of the members of the BoD: the presence of under 40s among the leaders has sharply declined. Among family businesses with a BoD, in fact, only 26.4 percent of companies have at least one director under the age of 40 (ten years ago it was 46.6 percent, although the comparison should take into account the progressive aging of the Italian population as measured by ISTAT). Another aspect to pay attention to in terms of diversity on BoDs is the level of inclusion: only 37.6 percent of companies have a share of the least represented gender (women) above 33 percent (an improvement of only 3 percentage points from ten years ago). A figure that underscores that Italian family businesses still have a lot of work to do before making a transition to more evolved governance models.

Despite this, there is no denying the fact that family businesses represent a winning organizational form in more ways than one-all the more so in today's highly unstable environment.

Despite criticism with respect to the risk that power concentration might pose, empirical evidence shows that family businesses play a primary role in both emerging and already developed economies.

Every year, the AUB Observatory represents an important appointment for those realities that are part of the group of family businesses and that consider the issue of governance as crucial for the development and growth of the company. They include Angelini Industries, whose governance model aims to combine the long-term vision and stable shareholder structure typical of family business with structured corporate governance practices and accountability of externally recruited management.