New data reveals which of the world’s largest corporations are still under the control of their founding families
In the past two years, the world’s leading family businesses have collectively grown their revenue by 10 per cent, outstripping the performance of the global economy.
Experts say it is their longevity and stability that ensure the success of these businesses, some of which are centuries old.
The findings come from the 2023 Family Business Index, which tracks the 500 largest global businesses that have been passed through multiple generations of a family, or who have multiple family members in its leadership team.
These 500 family businesses generate over $8 trillion in revenue and employ 24.5 million people. If they were a country, they’d be the third biggest economy in the world.
The US remains far and away the world-leader in family business, with 118 companies in the Top 500, collectively accounting for $2.7 trillion revenue and 6.3 million employees.
‘The US has an entrepreneurial spirit, and has been a free economy for decades, which enables these legacy family companies,’ explains Helena Robertsson, EY Global Family Enterprise Leader.
Wal-Mart alone accounts for a fifth of this revenue, with income of $580 billion. The megamart empire is still firmly in the Walton family’s hands, with chairman Greg Penner the grandson-in-law of founder Sam Walton.
In 2014, Rob Walton, Sam Walton’s son, said of Penner’s appointment to the board: ‘One of the Board’s most important responsibilities is long-term succession planning, and the company spends considerable time planning for stability and continuity.’
The US is followed by Germany, which has 78 of the top family businesses, with $1.13 trillion in collective revenue. Schwarz Group, the German grocery conglomerate that includes Lidl and Kaufland, is the largest family-owned business outside of the US.
Josef Schwarz founded the company in 1930, when he became a partner in fruit wholesaler Lidl & Co, which he developed into a general store. Lidl opened its first store as we know it today in 1973, in Ludwigshafen, and became a German household name by the 1980s.
Despite the slowdown of the global economy, most of the family businesses managed to grow their collective revenue in most regions. China, however, saw their collective family business revenue fall, mirroring the national economic picture as they struggled to emerge from lockdown.
Amid the economic and geopolitical turmoil, longevity seems to be core to the success of family businesses. Only 34 of the 500 businesses in the 2023 index are new entrants.
A third (35 per cent) of the new entrants are from Europe, and a quarter each from the Americas and Asia-Pacific.
'The overall composition Index is stable, with only 7 per cent new entrants this year, proving the resilience of family firms,' says Dr. Thomas Zellweger, Chair in Family Business, University of St. Gallen. 'The growing prominence of Asia-Pacific companies is also striking and a sign of the economic power these family-owned enterprises wield in the region.'
Half of the new entrants came from the Advanced Manufacturing & Mobility sector, showing the recovery of the manufacturing sector post-pandemic.
In 2023, AM&M businesses made up 29 per cent of the index’ total revenue, up from 25 per cent in 2021.
Meanwhile, consumer businesses and financial services both saw their revenue share fall.
Across the whole of the index, just over half (55 per cent) have a CEO who is not a member of the family, unlike Koch Industries, Dell, Comcast and Bosch, which are all still headed by a family member.
Unsurprisingly, older companies are less likely to be led by a family member. Indian conglomerate Aditya Birla Group, which ranks 20th on the index, is one of only a quarter of firms aged 150 years or more that are still helmed by a member of the family.
But notably, the proportion is almost as low among the youngest companies.
Robertsson says that younger companies likely have a smaller family pool to come from, so may struggle to pass on control from generation to generation. The ones that do, set a precedent that may continue for decades or even centuries.
'Within the family they’ve found a mechanism to stay connected to the business,' she says.
'They’ve agreed on principles and set up a family charter. That's a challenging shift to manage, to create that longevity.'
Search the table below to explore the world’s largest family businesses:
Main image: Succession/HBO