In March, EY celebrated the 10th anniversary of the Family Business Award of Excellence. This award rewards family businesses that excel in sound and sustainable governance. The theme of 2024 was to focus on the Nextgen. This year, the East Flanders-based VPK Group received the award. And with good reason, because the family business is also considered a strong example of how the new generation can be successfully introduced into the family business.
The choice of the NextGen theme was a conscious decision. Through our contact with family businesses in the past few years, we learned that the NextGen is a driver for change and new focal points within family businesses. Especially regarding ESG, but also in terms of the accelerating digitalization. The award ceremony was an ideal moment to have a discussion with both generations. And this in the presence of finalists who are already very far along in their ESG journey.
However, the finalists of the Family Business Award of Excellence are not representative of all family businesses in our country. Their ways of working count as best-practices. Hence, EY sent out a survey to the NextGen so they can state their observations candidly. We inquired about their motivations and concerns. How do they feel about the corporate approach taken by the leading generations with regards to ESG? And most importantly, where and how do they want to make changes? We provide some insights from the survey, analyzed in collaboration with Dr. Raphaelle Mattart, academic expert on family entrepreneurship in corporations.
1. The NextGen wants to be heard more
One of the key takeaways from the EY NextGen Survey is that, within the context of family businesses and particularly with regard to ESG issues, the new generation (the NextGen) is asking to be more involved in strategic decisions. Intergenerational cooperation on these issues can be a tremendous strength for a family business, and yet many NextGen members feel that their voices are not heard and valued enough, if at all. And this runs counter to the NextGen's sense that they are more involved with ESG issues, that they can bring new perspectives, and also that they have more ambition when it comes to ESG matters. So, some argue for a quicker transfer of power, at least on these issues, to bring in a new perspective, combined of course with the experience of the NowGen. Others suggest creating committees to debate and decide on key actions on pressing ESG issues.