A15007 Family Business Evolution: Governance & Finance

At the end of the course the student will be able:

1. to assess the main finance and governance choices made by family businesses;
2. to design appropriate finance and governance choices for family businesses. 

In this way, the course contributes to prepare them to take future responsibilities within family firms or to work for family firms within consulting companies. 

The course provides the core and necessary skills for managing the financial dynamics of family business, presenting solutions that balance the needs of continuous development with typical governance arrangements. During the course, some cases of family businesses that have been able to combine these aspects will be introduced.

The course will analyse the financial strategies of a company that has a family as its main shareholder, as well as the issues and choices to be made to identify the best governance structures in order to meet the objectives of continuity and succession of the owner family.

Therefore, the main issues related to the generational change of the company, the related tools for the process of this transition process with specific focus on financial problems, will be addressed.

The course will examine the main tools that the family business may use to finance their business development, including but not limited to private capital.

Governance issues will be treated with the aim of obtaining a correct balance between ownership and management. Among the legal aspects, topics related to the preparation for succession preparation will be explored.

Lastly, it will be addressed the topic of protection and enhancement of the heritage of the family business and of the family business as an investor.

The course covers the most important finance and governance challenges facing family businesses, i.e. the following topics:

• the family as principal shareholder (family and company assets, the choice of management; property transfer);
• development financing (instruments and the access to capital; private equity; private debt; listing market: main instruments; M&A transactions);  
• the governance (balance between property and management; the guidelines for proper governance, self-regulatory codes);  
• governance and succession preparation (trust, statutes, family pacts);  
• the role of the family office (the family as an investor; the protection of company and family assets).

The course sessions are of two types.

1. The first type of sessions has a lecture format. Lectures are based on readings and will be enriched by some company visits, live testimonials from family firms, interactive sessions and cases analysis.

2. In the second type of sessions, under the supervision of an instructor, students are asked to prepare a group project.

ATTENDING students can pass the exam through a GROUP PROJECT based on slides and cases histories proposed during the course (and published on the course moodle page).

NON ATTENDING students, or attending students who failed the group project, have to sustain an individual ORAL exam on the slides, cases histories proposed during the course (and published on the course moodle page) and the two following textbooks:

Corbetta-Salvato "Strategies for longevity in family firms", chapters 7, 8 and 9 - Palgrave Macmillan

Koeberle-Schmid "Governance in family enterprises", chapters 2, 5, 6, 7 and 13.