Family-controlled corporations, overseen by dynastic foundations, face a unique set of communication challenges, notably how to meet stakeholder expectations while respecting family privacy.
In the coming weeks, members of an industrial dynasty will gather at an imposing villa on Via Giacosa in central Turin. The private meeting will consider last year’s financial returns for what is the “royal household” of Italian business: the Agnelli family.
Relatives gathering at the Giovanni Agnelli Foundation, named after the dynasty’s founder, will receive a detailed briefing from the family’s 33-year-old business scion John Elkann. The young engineering graduate will summarise the outlook for a conglomerate spanning cars, commercial vehicles, engineering and agricultural machinery, as well as assets including the newspaper La Stampa, art galleries and Juventus football club. This is Fiat Group, and Mr Elkann, the vice-chairman, will reassure the family that the business is soundly and prudently run. There will be no press conferences, no photographs and no press releases coming out of Via Giacosa.
As long-term advisers to several family dynasties, Brunswick has learned how much these businesses value the balancing-act of maintaining personal privacy while embracing the clear benefits of open communication. For those advising such organisations, three principal challenges dominate the communications agenda.
First, they must avoid creating a pattern of communication that fuels increasing external expectations. Company officials, second, need to communicate enough to enhance understanding, while guaranteeing discretion on personal family matters. And last, they have to focus on business performance, countering the media’s obsession with wealth and lifestyle. All this must be done while distinguishing between a family’s right to privacy and media accusations of secrecy.
Of these challenges, managing media interest in wealth, lifestyle and privacy is in danger of becoming the overriding objective for some families. Clearly, elements of the media are mixing entertainment with news, and today’s celebrity culture means that stories about the wealth and private lives of industrial families are always in demand. As one Fiat insider says: “The US media is fascinated by the family story and the lifestyle issue – a hangover from the Giovanni playboy era.” While many families do not publish their financial numbers, the media does not recognize “non-disclosure” when it comes to individual family members and their lifestyles. A reluctance to talk simply arouses the media even more. Every throw-away statement, or snatched conversation outside a company’s annual meeting, risks becoming headline news.
Given that risk, the “default” position for many families has been to limit their communications and to avoid all media coverage in the belief that it will invariably be personal. This cycle becomes naturally defensive.