Rise and flaws of a family business

WITH A history of some 175 years, C&J Clark is one of the UK's oldest family-owned businesses and, thanks to a reputation for producing good quality, comfortable shoes at affordable prices, a household name. But in recent years, the Somerset-based company has another claim to fame - for its internal strife.

The problems surfaced in the early 1990s, when the company, founded in the 1820s by the brothers Cyrus and James Clark, found itself under mounting pressure from a sharp increase in cheap imported shoes. Profits tumbled from pounds 41.7m in 1990 to just pounds 1.7m in 1993. Not surprisingly, the management came under attack from shareholders, largely made up of 1,000 family members. Even now the future of the company is still uncertain.

Peter Leach - arguably Britain's greatest expert on family-run businesses, an important sector of the economy - sees Clark as an example of the structural problems endemic in such concerns.

He uses the Clark story as a case study in Guide to the Family Business, a book he has written with Tony Bogod, a fellow partner in BDO Stoy Hayward, a firm of accountants specialising in advising growing businesses. They say the problems stem from having so many descendants of the founders dependent upon the company's fortunes. "When things are going well, such a `rentier class' is generally happy to sit back and watch the dividend cheques," write Mr Leach and Mr Bogod. "But if the income stream dries up, it can provoke a revolt."

The book also describes an overseas family business where the owner- manager had died. His widow was entitled to a third of the estate and his two children to two-thirds.

Bitter trouble started when the children decided their mother should sell her big, expensive house to provide them with two-thirds of the proceeds to finance the business.

But, though the peculiar circumstances of family businesses can make them prone to the sort of difficulties that inspire television programmes as varied as The Brothers and Only Fools and Horses, the authors stress that family businesses are not all bad news.

Large corporations are trying to adopt many qualities which are second nature to family businesses, including passion, commitment, flexibility in work, time and money, long-range planning, speedy decision-making, stability, reliability and pride.

Peter Davis, an authority on family-owned businesses, believes the long-term view is one of the most important aspects. "The privately held family business is the only entity that can truly build for the long run," he told a London seminar.

Independence is clearly as much a state of mind as it is a description of ownership. Sir John Harvey-Jones in his Troubleshooter TV series predicted a gloomy future for Morgan Cars.

But Morgan Cars continues to carve a niche in the volatile automobile industry. And Sir John writes in the book's foreword that he now realises "the unique nature of the skills required in running a family business".

Such organisations, he adds, "contribute a disproportionate share to our social stability and economic success".

t `Guide to the Family Business', by Peter Leach and Tony Bogod, is published by Kogan Page at pounds 14.99

Alan Bennett has criticised the “repellent” reality shows which dominate our screens
tvBut he does like Stewart Lee
Life and Style
The Google Doodle celebrating the start of the first day of autumn, 2014.
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
David Moyes and Louis van Gaal
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Life and Style
food + drink
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
A cabin crew member photographed the devastation after one flight
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits