71% of household companies reported development of their newest monetary yr, with 43% reporting double-digit development and 77% reporting that they anticipate to develop within the coming two years
Household companies with a communicated ESG technique are extra trusted by prospects (62% vs. 49%) than these that don’t, but 67% of household companies put little/no concentrate on ESG
Household companies with various boards (46%) have a slight benefit of these that don’t (43%) by way of double-digit development this yr
Two thirds of household companies say worker belief is crucial – but solely 36% say they’re targeted on attracting and retaining expertise
LONDON, March 21, 2023 /PRNewswire/ — Household companies with an organization goal related to the United Nations’ Sustainable Growth Objectives (SDGs) are performing higher than their friends throughout a number of monetary and social metrics, in keeping with PwC’s eleventh International Household Enterprise Survey.
The report, Rework to Construct Belief, which polled over 2,000 household companies throughout 82 international locations between October 2022 and January 2023, reveals double-digit gross sales development at 43% of household companies globally within the final monetary yr, up from 21% in 2021.
Notably, practically three-quarters (73%) of household companies that skilled double-digit development during the last monetary yr are these with a transparent set of household values and an agreed goal for the enterprise. This yr’s survey reveals an upward development within the share of household companies keen to cleared the path in sustainable enterprise practices, with half (50%) of companies surveyed with a goal related to the UN’s Sustainable Growth Objectives seeing double-digit development throughout the identical interval.
Household companies bounced again after the COVID-19 pandemic, and regardless of a constructive business outlook in 2023, the information reveals a disparity between priorities for leaders and focus areas which might be sometimes related to increased ranges of development. Excessive performing household companies in 2023 are proven to have:
Worker incentives (53%)
Boards dedicated to variety (52%)
Robust digital capabilities (47%)
As difficult macroeconomic headwinds impression companies globally, household companies in 2023 are largely dedicated to defending the core enterprise, masking prices, and surviving, growing considerably as a key precedence (+37%) in 2023 moderately than pursuing digital capabilities and introducing new services. Simply over a 3rd (36%) of household companies say they’re targeted on attracting and retaining expertise – regardless of the understanding that worker belief is vital to enterprise success.
There may be clear proof that being very superior in having an agreed and communicated ESG technique correlates strongly with success and different constructive attributes. Half (50%) of these surveyed who’re very superior in having an agreed and communicated ESG technique noticed double-digit development (42% for household companies not very superior on this space).
Constructing belief via dedication to goal
Basic to the distinctive challenges within the administration of household companies, these which might be purpose-led usually expertise increased ranges of belief (59%) between relations. In response to Edelman’s 2023 Trust Barometer, prospects now greater than ever anticipate motion from enterprise on social points, and that is mirrored within the rising variety of household companies who achieved double-digit development (52%) up to now yr, as present in PwC’s survey. Moreover, extra companies (10%) which might be working arduous to construct belief inside their corporations skilled the next degree of development in the identical interval. Nonetheless, solely a minority of household companies are taking routine motion to make sure goal is being tracked successfully, with 46% respondents publishing it on-line and 36% actively speaking it to relations.
Notably, regardless of the correlation between delivering on ESG (62%), variety and belief with prospects, solely 22% of household companies globally are at the moment focussed on it. With practically all respondents contemplating prospects their most important stakeholder group (95%), and extra companies which might be superior on DEI (10%) and ESG methods (8%) experiencing double-digit development, there is a chance for household companies to realize a aggressive benefit within the face of radical disruption and a altering financial panorama.
Peter Englisch, International and EMEA Household Enterprise Chief, PwC, stated:
“Household companies are displaying they’ll develop by welcoming change and constructing belief with digital communication and various boards – even in a difficult panorama. To proceed this trajectory, companies might want to re-orient to concentrate on delivering worth not only for prospects, however for society. Transformation, goal, and legacy are not converse, however intertwined.”
Digital capabilities for higher company governance and buyer relations
Important to supporting governance constructions and managing real-time data that feeds into decision-making processes, practically 10% extra household companies which have sturdy digital capabilities skilled double-digit development up to now yr. Additionally facilitating processes to collect buyer and worker suggestions, household companies totally trusted by these stakeholders are typically extra digitally superior. Nonetheless, solely two-in-five (42%) really feel they’ve sturdy digital capabilities and the share of companies focussed on enhancing on this space as a key precedence has fallen as a prime precedence for household companies since 2021, with 52% rating digital capabilities as a prime 5 precedence for the following two years.
Peter Englisch, PwC International and EMEA Household Enterprise Chief, concluded:
“Whereas market pressures and rising prices imply survival is the primary precedence for household companies globally, our newest information exhibits that these household companies that are focussed on digital transformation and variety, are reaping the rewards. Now greater than ever, constructing competence and attaining sturdy monetary efficiency are linked to company duty. The message is evident, for household companies to outlive, they need to rework. And that transformation is now.”
Board variety is essential for transformation
Legacy and succession planning are top-of-mind for household companies in 2023, with youthful and exterior voices usually cited as advocates for change and development. For instance, these adopting digital transformation are inclined to have extra various boards (49%). On this yr’s report, having greater than two non-family board members was strongly related to double-digit development. These companies additionally are typically extra superior in areas reminiscent of contributing options to society, the atmosphere, and variety, fairness & inclusion, focus areas that had been additionally linked to stronger monetary efficiency. But one-third of all respondents solely have relations on the board, 1 / 4 have no-one from a unique trade background, and solely 9% are thought of various. Household companies with board variety have a slight benefit of these that don’t by way of reported double-digit development this yr (46% and 43%, respectively).
Notes to Editors
About PwC: At PwC, our goal is to construct belief in society and resolve essential issues. We’re a community of companies in 152 international locations with practically 328,000 people who find themselves dedicated to delivering high quality in assurance, advisory and tax companies. Discover out extra and inform us what issues to you by visiting us at www.pwc.com. PwC refers back to the PwC community and/or a number of of its member companies, every of which is a separate authorized entity. Please see www.pwc.com/structure for additional particulars. © 2023 PwC. All rights reserved.
PwC’s eleventh International Household Enterprise Survey: FBS is a worldwide market survey amongst key resolution makers in household companies inside a variety of PwC’s key territories.The survey seeks to grasp the important thing points dealing with household companies. The survey staff performed 2,043 interviews with household companies, averaging 25 minutes between 20 Oct 2022 and 22 Jan 2023 throughout 82 international locations. Extra data is obtainable at pwc.com.
Mike Davies, Director, International Company Affairs and Communications, PwC UK: [email protected]
Dan Barabas, Supervisor, International Company Affairs and Communications, PwC UK: [email protected]