The Canadian economy has a long history of closely held family corporations as well as family-controlled, public corporations. Many become newsworthy as a result of family conflicts. No Canadian corporation has had the global impact of Rupert Murdoch’s News Corporation, which positions itself as the only vertically integrated, global media corporation and whose properties span 175 newspapers on four continents, prominent movie studios, successful broadcasters, and numerous publishing companies. This survey about family companies was triggered by publicized rifts between Murdoch and children from an earlier marriage.

Members of the CEO/business leader panel see families as essential for creating corporations but not for maintaining them. Families are vital for building new companies because the first generation has so many financial and non-financial reasons to create a family company while being unencumbered by second-guessers outside the family to slow its growth. But it is almost impossible for the family to retain control of its company because families all have within them the seeds of their own decline. “It is possible to see a family business go from first generation to second,” observes one CEO, “but very rare to make it to third generation intact.”

As another panellist put it, “First generation family businesses have played a major role in the development of the Canadian economy; however subsequent generations lose the focus and do more harm than good due to family infighting.”

These are the principal conclusions from this week’s COMPAS web-survey of CEOs and business leaders for the Financial Post under sponsorship of BDO Dunwoody LLP and the Canadian Chamber of Commerce.

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