Family businesses and responsible ownership

This article is part of the Newsletter #1 from the Chair in Family-Owned Enterprises (CFOE) at Esade and Andbank. Subscribe here.

“I want my children to be responsible owners.” This phrase is often heard in generational transition processes within business families. On the surface, it expresses a simple desire, but in reality, it encapsulates a deeply complex goal: to ensure the long-term sustainability and relevance of the family enterprise. As families grow and generations succeed one another, the focus tends to shift from management to ownership. This is because both the business and the family expand, increasing the number of owners who are not necessarily involved in, or connected to, the day-to-day operations. 

Stepping away from management means knowing less about the business, having less contact with it, and ultimately feeling less emotionally attached. That loss of connection can lead the family to shift from seeing the business as a life project that creates value to viewing it as a mere financial asset. 

A purely financial perspective risks undermining the value the family firm offers to both the family and society. Ownership comes with rights, yes—but more importantly, it comes with responsibilities. So when the focus moves from management to ownership, the questions families must ask themselves are: What does it mean to be an owner? How should that ownership be exercised? And most importantly, why remain an owner? 

In this context, “responsible ownership” is no longer optional. It becomes a strategic necessity for the sustainability of the family enterprise. Management can be delegated, but ownership cannot—and commitment must be cultivated. 

What is responsible ownership?

Being a responsible owner goes far beyond holding shares in a company. It means actively engaging with the business’s purpose, deeply understanding how it works, and participating in its governance in an informed way. As Foss and colleagues (2021) point out, responsible ownership requires three core competencies: 

• What is owned: Understanding the assets, their value, and their current and future impact.
• How it is owned: Designing governance structures that align interests and enable effective decision-making.
• Why it is owned: Being clear about the family’s purpose behind the business and acting accordingly. 

This framework highlights three key dimensions of ownership competence: 

• Matching competence: knowing what to own.
• Governance competence: knowing how to own.
• Timing competence: knowing when to own—and when to let go. 

Why develop competencies for responsible ownership?

Unlike other types of companies, family businesses cannot outsource ownership. They can professionalize management, delegate operational duties, even sell business units—but the role of owner is non-transferable. When this role is exercised without awareness or preparation, the risk of losing both economic and emotional value increases significantly. 

The goal is for all family members to understand the business, their role in it, and the impact they can have

As Pieper and Astrachan (2020) warn, when owners focus more on their rights than on their responsibilities, the family business enters dangerous territory. This imbalance can erode the company’s competitive advantage—or lead to the complete loss of the company or its assets. 

How is a responsible owner developed?

Building responsible owners is a lifelong process that begins in childhood and matures over time. There’s no official school for it—but there is a path forward. Developing responsible ownership requires working across multiple dimensions, from early education to adulthood. 

In their 2020 article, Pieper and Astrachan identify key developmental milestones. Between ages 3 and 5, children should begin learning the link between actions and consequences. Between 6 and 10, introducing basic concepts about money and fair trade helps them understand what a business is and how the economy functions. From 8 to 12, it’s important to teach investment and delayed gratification—for example, encouraging a 12-year-old to save their allowance instead of spending it immediately can be an early lesson in investing. Between 10 and 15, children can begin to understand the difference between ownership and management. By age 30, they should be familiar with financial statements, investment analysis, and the strategic impact of key decisions. 

This progressive approach not only educates—it builds confidence and a sense of responsibility. The goal is not for everyone to become a manager, but for each family member to understand the business, their role, and the influence they can have, directly or indirectly. 

The role of family values and culture

One often overlooked—but absolutely essential—element in developing responsible owners is the role of family culture and shared values. These values are the foundation that sustains the family and shape how things are done—whether it’s managing a business or co-owning financial assets. As Pieper and Astrachan (2020) note, developing technical knowledge about finance or governance is not enough without a solid values-based foundation to guide decision-making. 

Shared values act as a moral compass for owners

Sustainable family businesses rely not only on strong balance sheets, but on clear principles that transcend individuals. When a family collectively defines what it considers non-negotiable—such as integrity, community commitment, or quality work—it creates a reference framework that enables coherent decision-making, even in uncertain times. 

Shared values guide owners even when they’re not involved in daily operations. They also help set clear boundaries about what is and isn’t acceptable, reducing the risk of conflict—especially as the ownership group grows or becomes more diverse. Business families that actively cultivate these values and virtues are more likely to maintain long-term joint ventures, as Parada, Samara Dawson, and Bonet (2017) have shown. 

These values cannot be imposed. They must be lived, transmitted, and reinforced consistently from an early age. As generations change—and with them the family and societal values—those shared values must also be redefined and agreed upon collectively. A strong, coherent family culture works like an “immune system” for the business: it shields the enterprise from impulsive decisions, destructive conflicts, or drift from its core purpose. 

Self-esteem and belonging: pillars of commitment

Another key concept highlighted by Pieper and Astrachan (2020) is the development of self-esteem as a critical factor in building committed owners. Self-esteem is not merely a personal psychological trait—it’s a strategic asset when it comes to the future of a family firm. 

An owner with strong self-esteem: 

• Trusts their own judgment.
• Is willing to take on responsibility.
• Can make difficult decisions without avoiding conflict.
• Doesn’t need to compete destructively with other family members to feel validated. 

Self-esteem also promotes more effective, mature communication within the family. People with healthy self-esteem can accept criticism without falling apart, express their views without fear, and ask for help when needed—without feeling diminished. 

According to the authors, self-esteem is built over time through concrete experiences facilitated from childhood: setting clear boundaries, encouraging autonomy, allowing mistakes and learning from them, and—most importantly—offering honest, specific feedback. 

One simple but powerful practice is to listen attentively. When children or young owners feel heard, they develop a strong sense of belonging and commitment. This is the emotional foundation of responsible ownership: feeling part of something bigger than oneself. 

Conclusion: inheriting is not enough, one must belong

When a family manages to align these three elements—shared culture, healthy self-esteem, and a clear sense of purpose—it creates an environment that not only retains future generations but inspires them to innovate, contribute, and care for what they’ve inherited. 

Such an environment also equips families to tackle inevitable challenges with greater maturity—differences of opinion, professionalization needs, strategic changes, or even decisions to sell or transform the business. Hard decisions made with a strong sense of self and purpose are more likely to be sustainable and respected. 

Successful family businesses don’t hand out shares as prizes. They cultivate a sense of ownership as a calling

Developing responsible owners is not just a technical or legal matter. Responsible ownership doesn’t begin with a share transfer—it begins much earlier, with a way of raising children. As scholars like John Davis point out, business families have both the opportunity and the challenge of raising not just good children, but future responsible owners. That means teaching values, fostering self-esteem, giving them room to participate and make mistakes, and helping them find a purpose beyond material wealth.

At the same time, the literature speaks of stewardship—a mindset of care and long-term vision—and of psychological ownership, the emotional bond that younger family members can form long before they inherit any shares. Feeling heard, having a say in certain decisions, participating in business activities—these all nurture a sense of belonging and long-term commitment. At its core, it’s a way of living and understanding ownership as a mission, not just a right. Feeling part of something larger than oneself is the emotional foundation of responsible ownership.

Families that embrace this vision—who invest in deep conversations, allow for mistakes, and learn together—are more likely to leave behind not just a profitable business, but a meaningful legacy.

Management can be delegated, but ownership cannot. Ownership is a privilege that comes with great responsibility. The family businesses that succeed across generations are not the ones that distribute shares like rewards, but those that cultivate ownership as a vocation.