Highlights from the Baltic Family Business Conference 2024

Two panel discussions on “Family Firm Sustainability” (moderated by Olga Stangej, ISM University of Management and Economics) and “Next Generation” (moderated by Ivars Bergmanis, ViaClarus) featured  family business representatives—Elizabeth Bagger (Avanti Family Business Advisory), Donatas Dailide (Dojus Group), Indre Dargyte, CAIA (BeMyBond), Eva Fischer Hansen (Eva Fischer Business), Jon Fossen-Thaugland (Flyt Ledelse), Rasa Gulbe (Dati Group), Jānis Kossovičs (Optic Guru), Simmo Kruustük (Noo Meat Factory), Andrius Kurganovas (Biržu Duona), and Kristel Meos (Zenith Family Office)—who shared their personal stories highlighting the dynamics of working within a family enterprise, discussed the challenges faced by family businesses, such as maintaining relevance in changing markets and ensuring the engagement of younger family members. They also talked about how family values and business practices contributed to sustainability in terms of business longevity and how their education and external experiences prepared them for a role in the family business. 

Alexander Dyck's (University of Toronto and ECGI) presentation “Family-Controlled Firms and Sustainability” focused on the environmental sustainability performance of family-controlled firms. He examined whether these firms took environmental performance seriously, specifically through carbon emissions metrics. The findings indicated that family-controlled firms managed carbon emissions well, often better than widely held firms, although they performed worse on qualitative environmental metrics. Prof. Dyck's research challenged the negative perception of family control regarding environmental performance and highlighted the potential flaws in current ESG score weightings. The discussant for this paper was Morten Bennedsen (University of Copenhagen and ECGI).

Valerio Pelucco (LUISS Guido Carli) presented his paper “Family Firms in Entrepreneurial Finance,” which discusses the unique dynamics of family firms in the context of entrepreneurial finance, focusing on how family ownership influences corporate venture capital (CVC) activities. He examined the strategic and financial objectives of CVCs, the arrangement of these activities, and how family control shapes the structure and outcomes of syndicate networks. Prof. Pelucco's research highlighted the distinct strategies and performance implications of family-related CVCs compared to non-family CVCs, contributing to the broader literature on family firms and their impact on corporate outcomes. The discussant for this paper was Igor Kadach (IESE Business School).

Lien Vekemans (Hasselt University) presented her research “Exploring Access to Bank Loans in Private Family Firms,” which discusses the financial challenges faced by family firms during ownership succession, particularly focusing on the complex process of securing bank loans. She highlighted how bank loan officers evaluate these loans based on various factors, including the firm’s financial health and the successor’s plans, emphasizing the need for better understanding to improve succession financing strategies. The discussant for this paper was Ignacio Requejo (University of Salamanca).

The presentation “Should the Next Generation Show that They are Proud” by Fabian Bernhard (EDHEC Business School) discussed how family business members are concerned with their reputation and the perception of the owning family by others. He highlighted that displaying authentic pride related to efforts and accomplishments in the family business is viewed positively, while hubristic pride can create negative impressions. Prof. Bernhard emphasized the importance of adjusting the display of pride based on context, gender, and culture to manage socio-emotional wealth effectively. The discussant for this paper was Tobias Köllner (Witten-Herdecke University).

Anete Pajuste (Stockholm School of Economics in Riga, ECGI, and BFFI) presented her work on “Family Firm Performance and the First-Generation Change: Evidence from Latvia,” which examines the emergence, succession, and performance of first-generation family firms in Latvia, highlighting the unique challenges and achievements of these businesses since the early 1990s. Key findings reveal that initially, nearly half of these firms did not have a majority stake held by the founding family, but within the first few years after founding, families accumulated majority ownership, and only 16 percent of the sample firms have second-generation shareholders.  The discussant for this paper was Halit Gonenc (University of Groningen).

Marc Steffen Rapp (Philipps-Universität Marburg) presented his research “Better Safe Than Sorry—Labor Market Regulation and Cash Holdings of Founding Family Firms” on the impact of labor market regulation on cash holdings in founding family firms (FFFs), finding that FFFs increased their cash reserves in response to stricter regulations, unlike non-family firms that decreased their cash holdings. Their study, based on a sample of 4,693 non-financial listed firms across 17 European countries, showed that FFFs' focus on financial flexibility drives this behavior. The discussant for this paper was Janis Berzins (BI Norwegian Business School).

Igor Kadach's (IESE Business School) study "ESG Pay in Family Firms: Governance Matters" examined the adoption of Environmental, Social, and Governance (ESG) criteria in executive compensation within family firms. The research found that family firms were generally less likely to implement ESG pay compared to non-family firms, but governance factors like board independence and CEO duality significantly increased the likelihood of ESG pay adoption in these firms. The discussant for this paper was Karl Lins (University of Utah).

Valerija Kozlova (Transport and Telecommunications Institute (TSI) and BFFI) and Krista Jaakson (University of Tartu and BFFI) served as the academic track moderators.