Family businesses: business ties and emotions

External actors for consensus

Edmundo Yáñez, CEO of Inkafarma and Mifarma

In family businesses, it is necessary to have an independent board of directors as a buffer. This is a first step in resolving conflicts between family members and the general manager.

The formation of a board of directors made up 100% of family members presents greater difficulties, since both emotional and business relationships coexist in this environment.

Sometimes sides are formed and the manager doesn’t know which way to go, but you have to opt for the most convenient position for the company. It is also recommended that this position be held by someone external; One advantage is that if he does it wrong, he can be replaced; but, when it is someone in the family, it is difficult for him to lose his job and the company is affected.

Motivate the next generation

Jack Falkon, CEO of Plastic Industries Corporation

The first challenge facing family businesses today in Peru is the fact that many of our children choose to study abroad not only for master’s degrees, but also for their university career.

Our greatest challenge lies in ensuring that they maintain a commitment to the family business, that they choose to return and not stay abroad, either because they have found a partner or because they have received an exceptional job offer.

All this implies establishing a true sense of commitment.

We face the task of motivating our next generations, our own children, to stay in our country and continue with the company.

Clear rules for family members

Bernardo Suárez, General Manager of La Ibérica.

I believe that the family has to work in the family business, since it is their patrimony and they must seek its growth. However, certain rules must be established. First, a position should not be created for the relative; This must arise as a need in the company.

Second, the family member must compete with the rest of the market and, if they win, they can fill the position. Third, he must agree to market compensation. And, fourth, there must be an agreement that allows that, if the relative does not meet expectations, the board of directors can make the decision that that person leaves the company.

I think that, if the rules are clear, the relative can work in the company because in the end they are taking care of the interests of the family.

Family tax benefits

Camilo Maruy, partner of Alcázar & De las Casas Financial Lawyers.

There are assets that, due to their nature, entail tax benefits. Likewise, certain structures also generate advantages in tax terms. These can allow you to defer tax payments, reduce tax rates, or even eliminate taxes.

In this world of structures, we find examples such as the creation of a Peruvian family or personal trust.

Through these mechanisms, it is possible to postpone the payment of taxes from the moment the income is disposed of or comes out.

This strategy is accompanied by a structure that also facilitates the organization and order of succession and family aspects, in case the people or relatives require it.

Camilo Maruy. Photo: compositionLR

there will be hard times

Edgardo Vargas, Executive President of the Vilaseca Group

Profitability gives freedom. If the business goes well, the shareholders will be happy.

The problem is when the difficult moments come. In these cases, they are the ones who are closest, they are more incisive and they tend to try to get in because they feel they have the experience to make some decisions, and that is a turbulent area, sometimes it can end well and other times with different paths.

I have had the experience of companies with several shareholders where one cannot be alienated from what each one thinks. There is no formula for dealing with tough times, but anticipation is important. If there is going to be a problem, you have to announce it with enough time to be able to align solutions.

Leadership is no longer exercised by the greatest

Mariana Garland, Operations Manager at EAFC Maquisistema.

Resilience has to be present at all times. We must know that in the company we are going to have good and bad moments. We can have crises.

What I recommend is that companies evolve towards good corporate governance, which will ensure that we will be able to transcend time. For example, before the older man was chosen as the leader of the company and nobody questioned him.

Now things have changed, people have greater opportunities and access to education.

In this sense, it is necessary to choose the best person for the leadership position, and also consider the expectations, possibilities and particularities of each member of the family.

More than an investment, it is a legacy

Isabel Carvajal, development leader of the Carvajal Foundation

Although I made sure at the age of 18 that I would never be in any family business, I ended up devoting most of my time to it.

120 years have passed and we are currently 320, including the in-laws. We are at the gates of the sixth generation and we are still together. The reason? I believe that if one sees the family business only as an economic investment, it is very easy to leave, because there will always be something more profitable.

So, there has to be a connection that unites the person with the company, beyond the economic. As a family, we have maintained ourselves and built a legacy.

Currently, I am a shareholder and receive dividends. I want to continue to be part of it not only because I identify with the family, but also because I have a higher purpose in society.

we are not birds of passage

Jacques Mayo, CEO of Nuevo Mundo SA

Those of us who work in family businesses know that we will not be birds of passage and that the long-term vision is present.

That is an advantage because those of us in the executive role are very aware that if we do anything wrong, we will have to take responsibility for it in the future. There is a sense of personal responsibility and reputation associated with carrying out the role to the best of its ability.

We have also tried to establish protocols to establish barriers so that executive shareholders do not take advantage of them beyond their corresponding role. Once, I rented an apartment and the owner wanted a letter of guarantee from my company, which I refused because it is prohibited. The company does not guarantee anyone, they are barriers that have contributed to a healthy relationship between the family and the company, where ‘the goose that lays the golden eggs’ is always taken care of.

Jacques Mayo. Photo: compositionLR