2 things every family business needs to maximise long term success

Monday, 01 April 2019

Amy Braddon photo
Amy Braddon
Deputy Editor, Company Director Magazine

    With 3 generations working together, transparency and good governance have become Stillwell Motor Group's bedrock of success. Here's why your family business should follow suit.

    As the eldest second-generation member of the Stillwell family, Michael Stillwell FAICD played a key role in the transition and growth of Stillwell Motor Group (SMG) following the death of his father, Bib Stillwell, in 1999.

    Bib had established SMG in Kew, Victoria, in 1949 while in his 20s, later expanding the business into aviation throughout the 1970s and ’80s. Today, the business employs more than 400 people across eight car dealerships throughout Melbourne and wider Victoria, owns and operates two after-sales businesses, as well as a parts and workshop equipment business across Victoria, Tasmania, Queensland, South Australia and Western Australia. This year, SMG celebrates a significant milestone — its 70th birthday.

    Michael, director of Stillwell Family Investments, says it was always his father’s plan to keep the business owned and operated by the Stillwell family. “Dad always had ambitions for his children to join him in running the business and take it over one day,” says Michael. “He would pick us up after school and we would do the rounds to all of his car dealerships, watching how he interacted with employees. We were exposed to all aspects of the business from a young age.”

    When Bib died, Michael, his sister Marianne Stillwell MAICD, brothers Robert Stillwell, Nicholas Stillwell MAICD and Chris Stillwell FAICD carried on the business where their father left off. Michael says their father’s death was the catalyst for the family’s engagement with the AICD and Family Business Australia.

    stillwell family

    “It was clear our father’s corporate governance model was not sustainable,” says Michael. “The world was changing, regulation and compliance was tightening, and we had to ensure we had the right governance structures in place for the future. We wanted to honour what he’d built while putting a more contemporary set of governance principles in place.”

    They formed a family board with Michael and his siblings as directors, his mother as chair, and a non-family independent director. In 2014, the Stillwell Motor Group Board was created to focus solely on the operational issues and business performance. The Stillwell Family Board continues to oversee the family’s investment decisions and governance. “The modernised structure ensures the operational business has a consistent and strategic focus while allowing the transition to multi-generation family custodianship,” says Michael.

    There are effectively two trusts — one controlled by the family to manage family assets; which also oversees a second trust, which”sells cars and makes money”, says Michael.

    Michael played a key role in the family succession plan and the recruitment of a non-family CEO. He retired from his full-time role within the business in 2009. While no longer on the Stillwell business board, Michael remains connected as a member of the family board. Outside of the family business, he is chair of the Monash Children’s Hospital Foundation and chairs three syndicates for the CEO Institute.

    vintage photo stillwell group

    Today, siblings Chris, Marianne and Nicholas hold roles on the family and business boards and brother Robert has retired. Third-generation members of the Stillwell family work various capacities across the group, including Michael’s niece, Aubrey Stillwell AAICD, appointed to the family board in 2016.

    Following Bib’s death, Michael and his siblings realised the importance of the relationships their father had forged. “Dad built strong foundations for the business being open and transparent with his suppliers, stakeholders and the community — something we have done our best to continue as the second and third generation,” says Michael.

    “Each year, we head out on a roadshow to present our annual report to our key stakeholders,” says Michael. “The report is a reflection of the business performance and the family, and it includes our constitution, charter, purpose, mission and values.”

    Family planning

    For family business owners contemplating generational transfer, preparing to let go is more important than putting a succession plan in place and identifying a successor. This is a key finding of the Family Business Wealth and Knowledge Transfer report conducted by BDO with the Australian Centre for Family Business at Bond University examining the wealth transfer intentions of 320 businesses.

    It found 38 per cent indicated they intend to transfer wealth within the next five years; 93 per cent to transfer it within the family. It also found 70 per cent have not professionalised their management or governance structures and only 39 per cent have a complete succession plan that nominates a CEO successor. The report identified a “4L” framework to improve the chances of success: learn business, learn the family business, learn to lead the family business, and learn to let go.

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