What To Look For In A Successor

Integrity and commitment to the business are by far the two most desirable attributes in a successor to a family business, according to a recent study of 485 companies by Family Business Review.

Respect for employees was considered the 3rd most desirable attribute, while respect from actively involved family members was rated I lth and respect by non-employee family members was l9th.

Family business owners rated outside management experience for the potential successor as an above average characteristic in importance, surprising since many candidates for second generation leadership have never worked outside the family company.

Other important attributes included intelligence, self confidence, creativity, decision making abilities and experience, and interpersonal skills.

On average, responding firms were 38 years old, had 108 employees, and median revenues of $5.3 million. 4lVo were first generation family businesses and 97Vo of the families owned 50Vo or more of the responding company's equity. 85Vo of the respondents were male.

The authors rated a total of 30 attributes for potential successors, and all but four were rated higher than average in importance in choosing a successor.

Family business owners rated as relatively unimportant the age, gender and birth order of the potential successor, despite much past family business literature citing these as important determinants.

The researchers centered on attributes in eight categories:

(l) Relationship to the current leader,

(2) Relationships to other family members,

(3) Family standing,

(4) Competence,

(5) Personality traits,

(6) Current involvement in the family business,

(7) Age of the potential successor, and

(8) Compatibility of goals with the curTent ceo,

Act Limits Y2K Liability

The U.S. House of Representatives has approved legislation to minimize lawsuits against businesses concerning Y2K computer problems.

The Year 2000 Readiness and Responsibility Act, H.R. 775, would obligate potential plaintiffs to notify a potential defendant so that it could attempt to correct the problem and allow for alternative dispute resolution before any trial.

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OPEN HOUSE (above) celebrated Peterman Lumber's 20th anniversary marked new 20,000-sq. ft, Customer Service Center (see next page).