The Key to Institutionalization in Family Businesses: Board of Directors

The Key to Institutionalization in Family Businesses is the Board of Directors
The Key to Institutionalization in Family Businesses is the Board of Directors

📩 26/09/2023 09:58

EGİAD At the "Board Structuring in Family Companies" seminar organized by the Aegean Young Businessmen Association, information and experiences about the success stories and institutionalization processes of family companies were shared. It was stated that one of the first things to be done in family companies that want to progress towards institutionalization is to review the structure of the board of directors.

The opening speech of the event was made by EGİAD President Alp Avni Yelkenbiçer mentioned that when current data is examined, there are more family businesses compared to registered businesses in Turkey and in the world, and stated that this situation emphasizes the importance of family businesses in Turkey. Yelkenbiçer said, “While 80% of registered businesses in the world are family businesses; In Turkey, this rate is at the level of 95%. Many of the leading companies in Turkey are family businesses. In order to ensure the continuation of these companies, which have a large share in the economic structure in Turkey, many supports such as institutionalization, company constitution and consultancy come to the aid of companies. We are also in this context EGİAD We started these organizations considering that approximately 60 percent of our members are family businesses. "We intend to continue the information seminars we started for Family Businesses and later combine them with TAIDER," he said.

The presentation was made by DEU Faculty of Business Administration, Accounting and Finance Department Head and EGİAD General Secretary Prof. Dr. Fatih Dalkılıç stated the importance of institutionalization in company management along with the developing industry and industrialization and said, “While the countries that made the industrial revolution have centuries-old enterprises today, unfortunately, the lifespan of companies in developing countries like us does not last very long. Here, the structure of the Board of Directors in family companies is of great importance. "If we want to have centuries-old companies, we have to adapt our management approach to today's conditions," he said.

Stating that corporate governance processes in family companies will be carried out by boards of directors with a professional perspective, Dalkılıç said, “The performance of the boards of directors is of key importance for the sustainable success of family companies. For this reason, it is necessary to observe the balances in the triangle of Family-Ownership-Professional Employees,” he said.

Talking about the characteristic features of family companies, Dalkılıç explained the changes that can be made in family companies from a corporate governance perspective as follows: “The Board of Directors is the most important and strategic element of a company. In this sense, it is very important for every company, ranging from a micro-sized business to an international business, or from a public company to another company with a few shareholders, to design an "ideal" and functional board of directors for its own needs. The board of directors is one of the basic mechanisms within the company of the approach we call corporate governance philosophy. The board of directors is defined as the body that represents the owners in companies, is regulated in different ways in the laws and regulations of different countries, but has similar basic structures and has the strongest powers within the scope of the company. Businesses ensure continuous control of senior management and business activities through the board of directors. The performance of boards of directors is of key importance for family businesses to be sustainably successful. For this reason, it is necessary to observe the balances in the triangle of Family-Ownership-Professional Employees.”

EGİAD Stating that experience and innovative ideas come together in a melting pot and that the young business world's ideas, project proposals and brave approaches to innovations positively trigger the structuring in family companies, Dalkılıç said, “Today, we are one of the NGOs with the highest number of young members. In this direction, we achieve successful processes in the structuring of New Generation Family Companies. I believe that this seminar will also produce positive results.” he said.