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'My father left the entire farm to my brother. What can I do?'

Tuesday, 09 January 2018

"Not being fully included in a will can be a matter of losing your life's Work"     Q. I am a farmer's son and am now in my fifties.

 

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Problem Solver: How do I get my father to let go after handing over reins?

Tuesday, 09 January 2018

Fergal Quinn gives his advice below to a successor on the common struggle of a famiy business Handover.     Q. I am 33 and have been

 

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7 Reasons for Enduring Power of Attorney

Tuesday, 09 January 2018

An Enduring Power of Attorney is a document in which you appoint who should look after your personal and your financial affairs in the event

 

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Sunday Times Article - The "sticky baton" of family business succession
Friday, 11 August 2017 00:00

We trust that you will discover is a highly valuable read below from the Sunday Times.

Succession is the key subject as it is keyin reality when running a family business . The importance or succession is discussed well and the why it is so important to encorporate it into your Family business as soon as possible.

 

 

When Ted Dwyer became temporarily deaf in one ear a decade ago, he sent his first text message, asking his son Eamon to come home from Australia. Though Dwyer did not know it, this was the start of the process of handing over the reins of City Life Wealth Advisors, a life and pensions brokerage he set up 46 years ago.

 

“For a while Eamon worked for me, then we worked together, and now I work for him,” says Dwyer, 70, who has opted to leave the business to his son rather than give shareholdings to all four of his children.

 

“Other parts of the estate can go to other people, but Eamon will get the business. It’s a big risk because if the business was to fail, he would get nothing.”

This is the conundrum Dwyer now helps other families address, through his consultancy Ted Dwyer Family Business. He went back to college to study succession planning and has since helped clients manage the transition of their businesses to the next generation.

 

“One problem facing many family businesses in Ireland is that there is really only enough revenue in them to support one family, not two or more,” says Dwyer.

 

Emotional issues are tied up in handing over the reins, too. “Eamon and I have been working on this process for 10 years, and, even though it turns out he’s much better at the business than me, letting go is difficult. I’m still not used to it.”

 

For the Dwyers, it helped to have an outside chairman on the board to act as a mentor to Eamon and ensure the interests of the business, rather than the family, were to the fore.

Once you have made the changeover, it is important to accept it, says Dwyer. “Things happen in the business that I don’t necessarily agree with. If I’m asked, I’ll give my opinion, but I let Eamon make the decisions.”

 

The handover of many businesses was complicated by the recession, but they are getting back on track in the improved economic environment, says JJ O’Connell, of Family Business Ireland, a consultancy. He points to a recent report by the Economic and Social Research Institute, which estimated that the 55-64 age group in Ireland has wealth — including houses, pensions, investments and small businesses — worth nearly €350bn.

 

“A huge transference of wealth to the next generation is expected in the coming years,” says O’Connell. “It’s a real economic issue for Ireland as a whole to make sure this is managed efficiently.”

 

Whether family or not, the next generation of management must be educated and trained to take on a business. Companies should start succession planning as early as possible, says O’Connell, with simple business continuity plans outlining who will step into a particular role during a crisis.

 

“You don’t want to leave these matters until circumstances take over, be it a car accident, stroke or any of the things that can affect a family. You may not realise at the time that it is in fact the start of an intergenerational changeover,” he says.

 

An upshot of the recession is that it has put off many next-generation members from taking over the family business, particularly where people saw how hard their parents worked for little return.

 

“We’re helping a lot of businesses with managing changed expectations for the next generation,” says O’Connell. “In other cases we’re seeing sons and daughters stepping in and taking over their parents’ business debts. The scars of the recession are there, but family businesses typically don’t talk about them.”

 

Stewart Dunne, a partner in the audit department at accountants BDO, says there has been a post-recession increase in business handovers, driven by the fact there is more value in businesses, greater economic certainty and larger amounts of money around than in recent years. Causes for concern remain, however.

 

“First, it’s a question of whether there is enough money in a business not just to fund the retirement of the parents, but also whether there will be enough left in the business to ensure it’s viable and has enough working capital,” says Dunne.

 

Second, if parents are looking to take a step back, do the children have the skills required to take over, or will the business need outside professional help? If the latter is required, parents must be “really hard-nosed and commercial” in putting the business first, adds Dunne. If the plan is for children to eventually take over the business, it is important they get experience elsewhere first.

 

“The problem for any family business is that it’s very easy to operate in a cocoon. They might know a lot about their own business, but not about how businesses in other sectors operate, nor even what their competitors are doing,” says Dunne.

 

Bringing in managers from outside may help, but it can be hard to achieve. Owners of family businesses often find it difficult to attract ambitious people because those they seek might fear playing second fiddle to a lesser-qualified boss whose name is over the door.

 

“To attract top talent to a family business you need to incentivise, and you have to realise that a shareholding will more than likely be a part of that,” says Dunne. “Family businesses are often too reluctant to consider giving away a stake to outsiders, even though it can be the best way of attracting the high-performing management required.”

 

Ironically, one of the biggest threats to a business can be the entrepreneurial spirit that established it. Not knowing when to go, or refusing to relinquish decision-making, is the hallmark of what has been termed the “sticky baton” of intergenerational handovers.

 

This was not an issue, however, for Rachel and Frank Doyle, the founders of Arboretum, a Co Carlow garden and retail centre. Their sons, Fergal and Barry, approached the couple with a proposal about taking over the business.

 

The transition was helped by the brothers’ complementary skills, says Fergal. Barry is a horticulturalist who looks after the retail side, while Fergal is in charge of administration and marketing.

 

“We both know what is required of us. Our parents let us make our own successes and mistakes,” says Fergal.

The original business has grown as a result, and the brothers have opened a second outlet in Kilquade, Co Wicklow.

“At some point the older generation has to give that level of trust when it comes to the decision-making, and let us get on with it,” says Fergal.

 

 

 

 

 

 

Source: Sandra O' Connell, The SUnday Times Newspaper.

 

 

 
The Hofstede Centre
Wednesday, 24 May 2017 00:00

Thinking of going Global with your business?

Are you looking to move your business into a country that may have  completely different cultures and views?

Under National Culture, Professor Geert Hofstede states that values in countries can be distinguished into categories. The original categories are:

  1. Power Distance (PDI),
  2. Individualism versus Collectivism (IDV)
  3. Masculinity versus Femininity (MAS)
  4. Uncertainty Avoidance (UAI).

Long-Term Orientation (LTO)  was added in 1991 and there are others not fully distinguished but the website gives great insight to what categories are more dominant in each country. This is important aspect to have knowledge on if you are thinking of going global.

Click here to read more:

http://geert-hofstede.com/national-culture.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Why You Need Emotional Intelligence to Run Your Family Business
Wednesday, 24 May 2017 00:00

Leaders who are emotionally aware have a knack for reducing conflict and building lasting relationships, two qualities that are beneficial to businesses of all kinds, but particularly family businesses, where the line between personal and professional matters is easily blurred.

 

Click here to read the full article:

http://www.entrepreneur.com/article/244127

 

 
A Family Business conversation
Wednesday, 01 March 2017 21:52

A Family Business conversation - Friday 10th March 2- 4pm at the Northside for Business Campus, North Ring Road, Cork. David Donegan Managing Partner Donegan Solicitors and JJ O'Connell (myself) are hosting a two hour briefing as part of Enterprise Week with Cork City LEO. Places are limited - just 20. This is a free event.

 

Recent high profile family disputes have once again raised awareness and interest in succession planning. It is regrettable that it takes the circumstances of a court dispute to focus the mind of others to look at the issue. However family business succession is a complex and sometimes emotive issue. Each family is unique and solutions differ. David is one of Ireland's most expert and experienced advisers and we have worked together for over twenty years.

 

If you are a parent, son, daughter, sibling, in-law, or adviser we invite you to join us for a confidential chat that we hope you will find of value.

 

 

For more information please contact us on the following:

 

  • Tel: 021- 4211433
  • Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

 
The Enduring Family Business
Wednesday, 22 February 2017 23:00

The Cork Family Business Breakfast meeting hosted by Cork Chamber of Commerce and Chartered Accountants Ireland, Cork Society was a great success last Friday the 17th.

 

The four speakers covered all areas necessary and were very encouraging of being proactive in an enduring family Business:

Brian O’Brien of PWC presented the findings of the 2016 PWC Family Business Survey and shared his views.

 

Brendan Twohig of MK Brazil who spoke about the Tax Implications in Family Business and it was the funniest tax talk I have ever heard.

 

JJ O’Connell of Family Business Ireland & Plato Cork and Jan Harte owner of Jan Harte & Associates co-presented. JJ focused on the Opportunities and Pitfalls working in a Family Business and the Importance of Planning & Processing and Jan Harte spoke about the Importance of Culture in Family Business and How to Create the Culture you want.

 

 

 

 

 

To read more or receive more information, please click on the link below:

 

https://www.linkedin.com/pulse/enduring-family-business-jan-harte

 
Mother and son in dispute over Kilkenny group ownership
Wednesday, 22 February 2017 22:55

A dispute between mother and son about the ownership of the well-known Kilkenny group of luxury design retail stores, employing 300 people, has come before the Commercial Court.

 

Greg O'Gorman claims his mother Marian, the CEO of the company running the stores, summarily terminated his employment as group marketing director last July in a demeaning and humiliating manner.

He said this was after 13 years’ service and no suggestion of misconduct or non-performance on his part.

He said he, his wife and three children, had been left "financially destitute" and he had been unable to get alternative employment.

The court heard that despite promises over years of a share transfer for his hard work, Mr O'Gorman's mother last June publicly repudiated a signed "family constitution".

He said that under this document she held legal ownership of shares in the company in trust for the O'Gorman Family Business Partnership made up of himself and his three siblings, Christopher, Melissa and Michelle.

 

All four siblings hold a 25% share, with the estimated value of his shareholding at €12.5m, it is alleged.

Mr O'Gorman said the "enormous personal toll" of these events has been compounded by marital disharmony between his parents who recently separated after 41 years of marriage.

Mr Justice Brian McGovern said the case was "peculiarly suited" for mediation and urged the parties to consider it.

The judge said it would be "very undesirable" to have this family dispute involving a successful business being explored publicly.

Mr O'Gorman's Senior Counsel, Rossa Fanning, said he would convey what the judge had said but, unfortunately, there was a "history of acrimonious disputes" which Mrs O'Gorman had found herself at the centre of over years.

 

The judge agreed to join Christopher O'Gorman, Castle Close Road, Blarney; Melissa O'Gorman, Mount Street Crescent, Dublin 2 and Michelle O'Gorman, Fernhurst, Tower, Blarney, as notice parties and returned the case to June next.

Mr Fanning said Mr O'Gorman made no criticism of his siblings and was not advancing any legal case against them but needed to join them as the outcome of the case would affect their interests.

Mr O'Gorman said Clydaville Investments Ltd, which carries on the luxury design retail Kilkenny business brand, operates 15 stores with its flagship store at Dublin's Nassau Street.

 

It had a €27m turnover in 2015 and he had secured a preliminary desktop valuation of some €50m for the business.

He was employed full-time by Clydaville between 2003 and 2016 and, after turning around the performance of the Galway store, was promoted by his mother to more senior roles and later to group marketing director.

The business flourished particularly during and since the economic recession, due "in no small part" to his management contribution, he said.

He made many personal sacrifices to ensure the success of the business, including working exceptionally long hours for a salary that did not reflect that, he said.

His mother represented he was effectively working for himself because of her promises to transfer a shareholding to him, he claimed.

To give effect to "repeated" promises, she convened family meetings and instructed advisers from 2009 leading to her and all four children being bound by terms of a family constitution executed in September 2010, he claims.

That evidenced the creation of a family partnership involving the four children as general partners and their mother as managing partner with Mrs O'Gorman continuing as the named shareholder of Clydaville but holding the shares in trust for the O'Gorman Family Partnership, it is claimed.

 

All parties complied with terms of those documents until a company meeting of 22 June 2016 when his mother read a prepared statement the company was no longer to be considered as a "family company", he said.

His employment was summarily terminated without reasons shortly afterwards, he said.

He was "shocked and personally devastated" and found "profoundly upsetting" his mother "publicly reneged on promises and commitments given to me over many years".

He lodged a claim for unfair dismissal before the Workplace Relations Commission in December 2016 and sought advice, leading to this case being initiated

 
What independent directors bring to a board
Tuesday, 03 January 2017 21:26

Doctors are advised not to operate on their family members, and there is good reason for this: Judgment can get skewed and the result can be less than ideal.

Likewise, a director should not have an overly emotional tie to the company he or she is in essence “operating” on—whether that tie be a family connection or financial dependence.

If there is one thing that great boards have in common, it is that they include truly independent directors.

Independent directors bring the following qualities to a board:

 

• Balanced focus on present state and future needs

• True objectivity

• Transparency for all shareholders/stakeholders

• Proper assessment of risks

• Elevation of the company to the next level.

Be sure to take one on board. Should you need more advice, please do not hesitate to contact us here at Family Business Ireland.

 

 

 

 

Source

https://www.familybusinessmagazine.com/what-independent-directors-bring-board

 
Why family businesses may be losing the war for talent
Tuesday, 03 January 2017 21:12

Although privately owned family businesses enjoy significant competitive advantages to help attract, engage and retain executive talent, family firms also face several common compensation challenges.

 

Informal pay governance process: Compensation governance in private family firms tends to be a bit more informal and less structured than in public companies. The compensation committee usually consists of family shareholders and insiders, rather than independent directors. When insiders serve on a compensation committee, executive pay discussions can be more personal and potentially contentious.

 

Opaque compensation plans: Many family companies offer unique compensation programs, but these programs are sometimes opaque and not fully understood by all stakeholders. Obscure features of the compensation plan may persist, and executives may lack a complete understanding and appreciation of the value of the total package.

 

Below-market long-term incentives: There are numerous reasons why family companies offer below-market long-term incentives. These reasons include the family’s unwillingness to share equity and thus dilute both ownership and earnings. Thus, it is often unrealistic for a private family company to match the long-term incentive compensation levels offered by public companies, and the total compensation strategy must consider this shortfall.

 

Absence of a total compensation strategy: Family companies often lack a cohesive compensation strategy covering all elements of executive pay: base salary, annual incentive, long-term incentives and benefits/perquisites. The company leaders may not understand how all of the elements of pay fit together as well as the trade-offs between various elements. The family company may find itself leaning too much on the culture and goodwill of executives, believing that loyal, long-tenured executives are less concerned about compensation.

 

Lack of external market knowledge: Private family companies often lack an understanding of current market practices and norms. Small companies place less emphasis on the external labor market. They tend to promote executive talent from within the company, until that is no longer tenable. A lack of knowledge about executive compensation trends can hinder the ability to compete for talent.

 

 

 

Source:

https://www.familybusinessmagazine.com/why-family-businesses-may-be-losing-war-talent

 

 
Keep a laser-like focus on your customers and their needs - it will help you stay relevant
Tuesday, 03 January 2017 21:00

One of the main things Jane Lorigan, CEO of Saongroup.com has learned is that it's not just the speed of technological change, but how fast people's expectations and behaviour evolve to match it.

 

When she joined IrishJobs.ie (part of Saongroup) the common wisdom was that "finding a job is a job in itself". Even though applying for jobs online was a step forward from newspaper advertisements and putting your CV in the post, back then - from a technical point of view - it was still a chore to apply for jobs.

People were accessing the internet via dial-up and connectivity was a major issue; one of our primary technical concerns was making sure the pages on the site loaded quickly.

Fast forward 12 years and everyone is carrying their own personal computer around in their back pocket, their lives conducted through the medium of the mobile phone. They use best-in-class technology every day and expect every online experience to match this level of technological development.

 

She advises to keep a laser-like focus on your customers and their needs. It will help you stay relevant and navigate the technological changes.

In an enterprise with multiple stakeholders, you have to identify who is most important to your business and be single minded about designing your product offering around them.

From the start they have always been clear that helping jobseekers find a job is what they are all about and that has stood to them. Even though new technologies are presenting every day, Jane states that they are able to sift through the noise and focus only on what makes getting a new job easier.

 

Instinct is good, but data is better.

When Jane started her career a lot of kudos was given to business "instincts", but good data is now fundamental to her decision making.

The digital adage "track and act" helps us measure the technology we implement and assess whether it is supporting job seekers in their job hunt.

Staying on top of technology is a challenge for every business today. As an organisation we've always embraced progress so we channel technology effectively. Jane likes to think that they've used it to take the work out of finding a job.

 
How to check if your business is safe from the digital hacking threat
Tuesday, 08 November 2016 23:33

While bringing many benefits, technology also brings with it many threats. With companies gathering more and more information on their customers, there is the increased risk of damage to those individuals should a company suffer a security breach. This information, if improperly exposed, could cause a lot of embarrassment to the people affected

 

The European Union's Data Protection Directive is concerned about any information, either by itself or used with other pieces of information, that could identify a living person. This information could be items such as email addresses, passport numbers, driver's licence numbers, financial details, union membership, medical history or information relating to a person's sexual, religious or political beliefs.

 

On December 15, 2015, the EU agreed to replace the existing EU Data Protection Directive with the EU General Data Protection Regulation (EU GDPR).

 

The EU GDPR brings in new obligations to companies and will come into effect in May 2018. Under the EU GDPR, there will be a number of new rules for companies. These will include the obligation to appoint a Data Protection Officer; companies who suffer from a security breach will be obliged to notify "the supervisory authority" without delay or within 72 hours; and there will be fines for companies who are proven negligent in the case of a security breach, to name but a few.

 

These new rules will have implications for how businesses handle and secure the personal data entrusted to it by its customers and staff. While it will take time for the EU GDPR to come into full effect, it will also take time for companies to be properly prepared for that eventuality.

 

The checklists that we have compiled (see above and below) will help you obtain better assurance regarding how your company is prepared for these new regulations. An incomplete or negative response to any of the following items indicates the relevant area of risk needs to be addressed.

 

Brian Honan is an independent security consultant with BH Consulting. He will be speaking at Dublin Info Sec 2016 along with industry leaders in the sector. For more information: independent.ie/infosec2016

 

 

 

 

Source: Sunday Indo Business http://www.independent.ie/business/small-business/how-to-check-if-your-business-is-safe-from-the-digital-hacking-threat-35132995.html


 
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