Almost half of Malta’s family firms plan to pass on ownership and management to the next generation, but a third will entrust management to executives outside the family, a PricewaterhouseCoopers study into local family firms has found. Only five per cent intend to sell or float the business.
The survey also found that most of Malta’s family businesses still have family members occupying senior executive roles, while just over half have relatives working in other roles.
Of the 100 family businesses interviewed by the Qormi-based firm by phone last month, 97 per cent said family members had senior executive roles, while 56 per cent have relatives who work in the firm but are not senior officials. Globally, the averages stood at 92 and 47 per cent.
Internationally, the global survey sought the views and outlook of nearly 2,000 family firms in more than 30 countries between June and September.
Fifty-eight per cent of Malta’s family businesses have non-working family member shareholders, 10 per cent higher than the global average; 11 per cent have relatives who do not work for the company or have shares but are remunerated in other ways.
Family businesses seem to be implementing more formal structures. Compared to the last similar survey two years ago, more family firms are adopting shareholders’ agreement to address conflicts, an increase of 30 per cent to 53 per cent this year. The involvement of third-party mediators is sought more in Malta (40 per cent) than by international family firms (24 per cent). They also measure performance more than overseas firms (40 per cent compared to 32 per cent).
They have also started to address issues related to family councils, entry and exit provisions, incapacity and death arrangements and family constitutions, but still lag slightly behind international family businesses.
More than 30 per cent of businesses recognise the importance national authorities place on them as key contributors to the economy – Malta stands in second place among the countries surveyed, behind the Middle East.
Meanwhile, 65 per cent believe the Government should make it easier for family businesses to access finance, 53 per cent say the Government recognises the importance of family business, and 41 per cent say the Government is doing what it can to help businesses survive or develop.
But they believe authorities could better support businesses to access finance and funding, grants and incentives, reduce red tape, invest in education and training, and improve favourability of tax regimes towards businesses.
Asked for their wish list for local family businesses, respondents listed specific types of grants or incentives for employment, training and start-ups, access to EU grants and more information on options, more advice and support to business professionals, a level playing field for legislation and compliance, tackling specific tax obstacles like capital gains tax and tax on reinvested profits, and faster settlement on invoices for work supplied to the Government.
The majority of family businesses believe their culture and values tend to be stronger than those of other organis-ations. They insist they retain staff, even in challenging times, and around three-quarters have a sense of community and support initiatives and employment in their areas.
Malta’s family businesses have experienced growth or sustained their perform-ance in the past 12 months, with two in three seeking to grow in the coming years. But they are aware they need to innovate and be more competitive in order to do so.