Celebrating the contribution of Irish family businesses to the economy

Ballymaloe House, Dawn Meats, Sysnet, P&G Cards and Flahavan's were among the winners at the inaugural Energia Family Business Awards held in Dublin in May. The awards were established to celebrate the contribution of family-run businesses in shaping the Irish business landscape and the economy generally.

With more than 200 entries received, the awards saw strong representation from across all sectors and businesses at different stages of development. “The range of business sectors represented in the award submissions shows our economy is diverse and fit for the future,” says Energia head of sales Alan Mulcahy. “At Energia, we partner with businesses all across the island of Ireland and are committed to the communities they serve. The volume and quality of the entries received augurs well for the future of the Family Business Awards as does the deserved recognition of innovative Irish businesses.”

According to Family Business Ireland director and chairperson of the awards judging panel JJ O’Connell, the awards are very timely in acknowledging family business. “They are the backbone and fabric of Ireland’s economy,” he says. “Despite their importance, the historical failure to transfer from one generation of ownership to the next generation of ownership is a significant issue for the economy. Some 72 per cent of family-owned businesses in Ireland cease to trade five years after the death of the founder. Only 13 per cent make it to the next generation. The successful companies, the ones we celebrated in the awards, are the families that have both a plan and a process.”

In his role as a judge, O’Connell says he was looking for clear evidence of such a succession process being in place. “We were looking for businesses that had transferred from one generation to the next and where the new generation had improved performance, enhanced capability and brought the business forward. The great thing is that the founders had enabled that to happen by going beyond themselves as entrepreneurs and businesspeople.”

Recognising achievements

Recognising achievements like this is very important, he adds. “To enable far greater numbers of family businesses to continue to trade over many years, there needs to be a greater awareness of the importance of family business succession planning. The inclusion of family business succession planning within the Action Plan for Jobs was an important step in prioritising the issue of succession planning.”

The importance of efficient wealth transfer should not be understated, O'Connell argues. "In 2018, Forfás looked at private wealth in Ireland. There is between €250 billion and €300 billion in the country. This is the first time there has been real wealth in the country and the majority of it is owned by people in their 40s, 50s and 60s. There is now a clear recognition that efficient transfer of that wealth is required. But taxation and other issues can make it problematic. Family conflicts, poor business structures, taxation, poor planning and other issue can present challenges."

But things are improving. "Four years ago, PwC looked at this and found that only 10 per cent of family businesses had a proper plan in place for the future. Their most recent report found that 18 per cent of them had a plan. That is still too low but is a very significant improvement in just four years and is evidence of increased awareness of the need for proper planning. That's where the awards come in. They are a celebration of the role of family business in the economy. They highlight the best-in-class and-best structured businesses and allow other companies to benchmark themselves against the best there is in the country."