A Family Member Is Only A Trustee
A legacy of 350 years spanning 13 generations that's what makes German healthcare and life sciences multinational Merck a much quoted example of family leadership continuity coupled with long term sustainability of business. Business Today's E. Kumar Sharma spoke with Frank Stangenberg Haverkamp, Chairman of the Executive Board and the Family Board of E Merck KG, headquartered in Darmstadt in Germany. Stangenberg Haverkamp, 70, who was in India recently, is the 11th generation leader of the holding company and head of the family. He talks about the various issues that family led businesses need to grapple with and how a family contract can help in smooth management of family businesses. Edited excerpts:
What should companies, young in their generational progression life cycle, focus on so that they can see many more generations?
The most import thing to do is to draw up a family contract early, very early in the second generation itself, when there are three or four people involved. If you leave it to the third or fourth or fifth generation, there will be more and more people involved and it will become nearly impossible. The family contract or a constitution or any legally binding written document should lay down all the rules and regulations for eventualities like if somebody wants to leave the family business, then who can run the business; how to split the dividends; and a lot of other
