In the Name of the Family (And Other Stakeholders)ADVANTAGES AND RESPONSIBILITIES: AT THE HELM OF FALCK RENEWABLES AS CHAIRMAN, ALUMNUS ENRICO FALCK TALKS ABOUT THE COMPLEX BALANCE OF USING (AND KEEPING) THE FAMILY NAME AS THE NAME OF THE COMPANY
“If we hadn't had a long tradition connected with the Falck name behind us, I don't know if we would have used the family name to chisten the new group in 2010.” Enrico Falck, Chairman of Falck Renewables, is candid, reflecting on the always complex balance between advantages and responsibilities in the daily life of companies bearing the name of their founders.
What convinced you to renew this very identifying connection between family and company?
History, which we have always looked back on with a certain pride, and the family name's recognizability at least in Italy, where it is rather rare and connected to a long industrial history, first in the steel industry and then in electricity. But the relationship between the name of the company and the family is still emotionally challenging. The family members involved in the company all feel the weight and responsibility of it. Our group has had the family surname since the early 1900s, when it was common for private companies to identify their brand with the name of the founding entrepreneur. There are still some sectors that have a critical success factor in eponymy, for example in fashion or consulting, because specific values or personalities need to be identified. But beyond the fact that you may feel a responsibility or that it may be a winning factor, an eponymous company and family name is a long and intense journey, creating bonds, memories and points of reference. Perhaps the simplest answer is that we wanted to continue this journey.
Have you ever personally verified a correspondence between an eponymy and the company's performance or greater transparency in financial reporting?
The company is listed on the Italian Stock Exchange and specifically in the Star segment, so we are required to be fully transparent in terms of financial communication. But in our case, and as I think happens in most eponymous listed companies, transparency is the fundamental tool with which a company that bears the name of the shareholder family demonstrates the utmost commitment to management that is as impeccable as possible, to protect all shareholders. As for financial performance, it is difficult to give specific answers. In our many years in business we have had good times and bad times and the difference is probably the resilience that the company has acquired thanks to the family's support.
How is a value such as transparency transferred from the family to management and the entire company?
By example first of all, especially in daily work. But above all, and simply, by demanding it. In other words, making it a professional requirement for business management. At that point, management’s administration and development skills can be based on something solid and sustainable and those working at the company will do so more relaxed and with greater confidence in the future. Thinking of our company archives, now over 100 years old, there is a legacy of quality and focus on administration. This was not only a technical requirement and did not belong only to the owners, but was a demonstration of care and, I would say, affection for the company from anyone who has anything to do with it, employees, family members or others.
Do you say this because sometimes “family” management of companies can be the chief enemy of transparency?
The role of family member is a complex one, both emotionally and professionally. Usually they have the bulk of their assets invested in the company directly, if they are owners, or indirectly, if they are the children or grandchildren of the owner. It is therefore difficult to process the fact that the independent variable is the company and not one's assets. This is typical, for example, when the company has to grow beyond the family's asset capacity; in that case it needs to be open to capital and give up control, at least in part. Otherwise the company and the family are contradictory and there is a risk that company growth is not sufficient to guarantee its competitiveness on the market. On the other hand, statistics indicate that family businesses are more resilient, especially in times of crisis, than companies with public shareholding, so the family model is actually an efficient one. The point is to have the right balance and to bear in mind that the company's sustainable growth must be the main objective of all stakeholders, whether they are shareholders or not.
Born in Milan in 1975, he is father of three children. Since 2014 he has been Chairman of Falck Renewables, the family business that has become a leading European player in the renewable energy sector. A graduate of the European Business School in Milan, at Bocconi he attended a Master in Small and Medium Enterprises in 2002. “I've never been an exemplary student,” Falck admits, “but that year at the Bocconi Master was an intensive and fundamental training program. All the more so in my case because, after the sudden death of my father Alberto (to whose memory the Chair of Family Business Strategy is dedicated at Bocconi, editor’s note), I discovered I needed to be better prepared to join the family group." Since March 2020, he has also been President of the Sodalitas Foundation, an initiative that promotes corporate social sustainability.
by Emanuele Elli
Translated by Jenna Walker