“It’s the family name that lives on. It’s all that lives on...” (Tywin Lannister, Games of Thrones)
We all care deeply about our family and want to ensure that whatever we pass onto younger generations stands the test of time. This concern is particularly acute for prominent families. When the older generation passes on a corporate dynasty to the younger generation – it is not only business assets and wealth they are passing on, but the family’s reputation and legacy.
The reputation of a family can be one of its greatest assets, but it is something that needs to be protected and cultivated. The line between business and personal is often blurred. For example, a business closely linked to a prominent family is particularly vulnerable, as any damaging allegations / controversy about a particular family member will have ramifications for the business as well.
Family legacy and succession planning is a hot topic and one that any family office or wealth manager will be well versed in. At Vardags, we think safeguarding reputation is an essential part of succession planning.
So what steps should prominent families be thinking about in this situation?
Knowing what’s out there
Despite the rise in technology, many of us don’t actually know what information is out there about us online.
One of the most empowering things a family can do is to establish precisely what information is out there about family members and those closely associated with the family. The results are almost always surprising. It will often uncover:
- Private information that they didn’t know was available, such as homes addresses, family photographs and details of planning applications – see ‘Protecting the Private’ below
- Some of the information might be disparaging – perhaps on blog sites or social media
- You might realise that the family’s online reputation doesn’t match the family’s values. For example, there is huge amounts of information about a controversial investment or business deal, but very little about the family’s philanthropic work
This information is critical to understanding your family’s current reputation and, importantly, what you want it to be for generations to come.
Protecting the private
Without being alarmist, prominent families are at a greater risk of being targeted by cyber criminals and identity thieves, as well as kidnap and blackmail attempts.
One of the easiest steps a family can take is to minimise the amount of private information available online; for example, residential addresses and other personal biographical data, such as photos or images of homes of your children’s school. Information available on social media also provides a rich source of intel for the unscrupulous. For example, if a family member checks into locations or venues via social media, they can quite literally be creating a map of their movements for members of the press, or worse, criminals. Some basic changes to social media privacy settings can disable these location services.
Next Gen’s online legacy
It only takes one careless tweet, indiscrete Instagram snap or careless remark to tarnish a family’s reputation.
What the older generation did as teenagers is, thankfully, less likely to come back to haunt them and is generally limited to some embarrassing photographs in a friend’s photo album. The risk for today’s Next Gen are far greater, as many are living their lives through social media. The toddlers of today will have a significant online legacy by the time they turn 21 and are looking for a job. It’s already become part of the recruitment process for employers to take a look at a prospective employees Facebook page, and this is only going to continue.
A blanket ban on social media is both unrealistic and unnecessary. But education on the risks associated with social media is essential. Basic guidance on privacy settings on sites like Facebook and Snapchat is key.
I’m seeing some families even drawing up a family social media policy. This can be as simple as an agreed set of guidelines on what the family’s approach to social media will be. The policy should reflect the family’s values, such as agreeing that overt demonstrations of wealth don’t fit with those values. For example, the family might want to draw a very distinct line between individual family’s members and the family business. Alternatively, the family members might be an intrinsic part of the business and part of the family “brand” – in which case making sure there are clear parameters on what is and isn’t acceptable is absolutely critical.
The aim is to both protect the family and encourage family members to live by its values, whatever those may be.
Dealing with disputes
Families argue. That’s an inevitable fact of life. But families should do all they can to ensure that those dispute aren’t conducted in the full public gaze and don’t irrevocably harm the family’s reputation and business.
We’ve seen one family break-down hitting the headlines in the US recently. The Dorrance family, who have a controlling interest in the Campbell Soup Company, have come under the spotlight following the death of their patriarch and the long-time Campbell chairman, John T. Dorrance Jr. Some family members announced their intention of selling their shares, which led to turmoil at the company and attracted the interest of an activist hedge fund.
Having a plan which sets out how family disputes are dealt with is vital. It’s also crucial to give the media as little ammunition as possible should the family end up in the headlines. That is why the steps outlined above are so valuable for minimising the risk of a small story mushrooming into a big one.