Governing the family-owned enterprise: an interview with Finland's Krister Ahlstrom
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10/8/13 11:57 AM
Title: Governing the family-owned enterprise: an interview with Finland's Krister Ahlstrom
Author(s): Joan Magretta
Source: Harvard Business Review. 76.1 (January-February 1998): p112.
Document Type: Article
Full Text: COPYRIGHT 1998 Harvard Business School Press http://www.hbsp.harvard.edu Full Text:
IS A COMPANY'S PRIMARY RESPONSIBILITY TO ITS shareholders or its stakeholders? What is the proper role of a company's board, and who should serve on it? To whom and for what are managers accountable? In the last ten years, a series of shock waves in the once staid realm of corporate governance has ignited a reexamination of these most basic of governance questions. Increasingly, we see signs that the old equilibrium is giving way. Large institutional investors are no longer content to be passive owners. At the same time, boards are stepping up--sometimes under pressure--to claim a more activist role.
While the debate has erupted with new urgency and high visibility in publicly owned corporations, governance has always been a contentious--although usually private-issue in family-owned enterprises.
And in most of the world, family-owned enterprises dominate the business landscape. Even in the United
States, family ownership is more prevalent than most people realize. It is estimated that over a third of the
Fortune 500 are family owned or dominated; for the world economy as a whole, the number is certainly over 50%.
As CEO of his family's $3 billion holding company, Krister Ahlstrom has been grappling with governance issues for more than a decade. The Ahlstrom Corporation was founded by Antti Ahlstrom in 1851 and is wholly owned by his roughly 200 descendants. Today few family members actually work in the company, but the family controls the board. Krister Ahlstrom will retire in the winter of 1998 after leading the company through a 15-year transformation.
Ahlstrom joined the family business in 1982
10/8/13 11:57 AM
Title: Governing the family-owned enterprise: an interview with Finland's Krister Ahlstrom
Author(s): Joan Magretta
Source: Harvard Business Review. 76.1 (January-February 1998): p112.
Document Type: Article
Full Text: COPYRIGHT 1998 Harvard Business School Press http://www.hbsp.harvard.edu Full Text:
IS A COMPANY'S PRIMARY RESPONSIBILITY TO ITS shareholders or its stakeholders? What is the proper role of a company's board, and who should serve on it? To whom and for what are managers accountable? In the last ten years, a series of shock waves in the once staid realm of corporate governance has ignited a reexamination of these most basic of governance questions. Increasingly, we see signs that the old equilibrium is giving way. Large institutional investors are no longer content to be passive owners. At the same time, boards are stepping up--sometimes under pressure--to claim a more activist role.
While the debate has erupted with new urgency and high visibility in publicly owned corporations, governance has always been a contentious--although usually private-issue in family-owned enterprises.
And in most of the world, family-owned enterprises dominate the business landscape. Even in the United
States, family ownership is more prevalent than most people realize. It is estimated that over a third of the
Fortune 500 are family owned or dominated; for the world economy as a whole, the number is certainly over 50%.
As CEO of his family's $3 billion holding company, Krister Ahlstrom has been grappling with governance issues for more than a decade. The Ahlstrom Corporation was founded by Antti Ahlstrom in 1851 and is wholly owned by his roughly 200 descendants. Today few family members actually work in the company, but the family controls the board. Krister Ahlstrom will retire in the winter of 1998 after leading the company through a 15-year transformation.
Ahlstrom joined the family business in 1982