Family business and ownership

Proportion of family members working in the business and the number of shares held by family members or relatives.

In terms of ownership, in 70% of the businesses at least half of all shares were held by the CEO or family members or relatives; indeed in just over half, all shares were family owned. Two other indicators of family businesses were:

  1. The number of family members working in the business on a daily basis: 22% had two (including the respondent) and 11% had three or more. Of the latter, 80% were 100% family owned.
  2. The number of generations of family ownership: 12% were multi-generational (2 or more generations), and 28% of these had three or more generations of family ownership. Some 60% of multi-generational businesses were 100% family owned.

Members in business

The number of family members is particularly noteworthy if we distinguish between two members – often a husband and wife team – and three or more. There was a marked predominance in the last group (three or more members) of manufacturers (80% versus 55% for two members and 42% for one). Three or more family member businesses were somewhat older and more likely to be small rather than micro or medium-sized, suggesting gradual growth.

Three-or-more-family-member businesses

In terms of personal business objectives, more three-or-more-family-member CEOs mentioned "other" objectives – reference to family business objectives were common – while in terms of competitive advantage they scored notably higher on solutions to customers’ unmet needs, marketing and promotion, and to some extent design.

Figure 11: Type of innovation by family members


Moreover, a higher proportion of three-or-more-family-member businesses were fast growers, with high profit growth, and industry-level innovation (see Figure 11). More were exporters. More had 100% family ownership. A somewhat higher proportion wanted to grow substantially, and fewer wished to become smaller or remain the same size.

Two-family-member businesses
Two-family-member businesses, on the other hand, compared less favourably than the other two groups. It is possible that these bear the brunt of work-life balance dilemmas and other competing objectives, and that some are lifestyle businesses.


Multi-generation family businesses were also much more common than single generation businesses in manufacturing (75% versus 45%), and in small and medium-sized businesses, partly because they were older (65% were founded before 1980 versus 19%). More multi-generation businesses had moderate turnover growth, but fewer were fast growers. Profit growth levels were not very different, but more exported (44% versus 35%) and more were industry-level innovators (43% versus 36%).

Overall, family businesses appear to perform well in the New Zealand economy.