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’Best for the family’: researching families and business
Journal Item
How to cite:
Mackie, Robin (2001). ’Best for the family’: researching families and business. Family and Community History, 4(1)
pp. 31–44.
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c
2001 FACHRS
Version: Accepted Manuscript
Link(s) to article on publisher’s website:
http://dx.doi.org/doi:10.1179/fch.2001.4.1.004
http://www.fachrs.com/pages/journal/journal_of_fachrs_archive.htm#May 2001
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1
‘Best for the family’: researching families and business
Robin Mackie
Department of History of Science and Technology
Faculty of Arts
The Open University
Walton Hall
Milton Keynes
MK7 6AA
Tel: 01908-652544
Email: r.l.mackie@open.ac.uk
Biographical Note
Robin Mackie is a researcher at the Open University. He is at present working on a project on
the social history of chemistry in Britain. He is also interested in family and business history.
Address: Department of History of Science and Technology, The Open University, Walton
Hall, Milton Keynes, MK7 6AA. Email: r.l.mackie@open.ac.uk.
2
‘Best for the family’: researching families and business
Abstract
For most of us, the term ‘family firm’ summons images of an old-established and perhaps rather
conservative business that has been passed down through the generations. This article starts by
using a study of one firm to argue that the stereotype conceals significant questions about firms,
families and the relations between them. It goes on to outline some recent historical work on
family firms by looking, in turn, at research on the incidence and character of family business,
on the strategies and performance of companies, and on the family dimension in enterprise. It
stresses the importance of the small-scale and the local in this research and notes that historians
are now using a range of sources familiar to local and community historians to develop this
field.
3
During the winter of 1996, the discreet world of Edinburgh’s business establishment
was shaken by a very public battle for the future of the transport and business services group,
Christian Salvesen plc. The cause of the conflict was a proposal from the board to hive off the
company’s most successful subsidiary. Sir Gerald Elliott, a former chief executive and chairman
of the company and still a substantial shareholder, denounced the proposal as ‘lunacy done to
satisfy some speculative fat-cat shareholders in the City’ and questioned whether ‘the board is
fit to carry on’ (Scotsman 26 Nov 1996; Financial Times 26 Nov 1996). The reply from the
current chairman, Sir Alick Rankin, was equally scathing. ‘Gerald is a nice chap, but not only is
he not up to date with the way the City works, he is deeply resentful of it . . . All he’s doing is
creating a degree of uncertainty in the mind of the shareholder’ (The Times 4 Dec 1996).
For journalists, the key to the story was the structure of Christian Salvesen’s
shareholding. The company had been floated as a public company in 1985, but over 200
members of the extended Salvesen family –- including Sir Gerald -- retained more than 30% of
the shares. An offer to buy the company in the summer of 1996 had collapsed when it failed to
win the support of family shareholders (The Times 7 Aug 1996). As a result the share price had
slumped. Institutional investors were less than delighted; the November proposals to demerge
the company (and raise a special dividend) were widely seen as their ‘payback time’. Despite
attempts to reassure shareholders, the board was unable to quell Sir Gerald’s rebellion. The
showdown came at an extraordinary general meeting the following March: 31% of shareholders
–- including most of the private ones –- voted with Sir Gerald. The institutional investors,
however, backed the board. Sir Gerald’s camp might claim the result was a ‘moral victory’, but
it was well short of a real one. The Scotsman concluded: ‘this is the unromantic and realistic
world of business where value is all’ (14 Mar 1997).
4
The story attracted a considerable amount of comment, both in the Scottish and the
London press: ‘Family at War’ proclaimed The Scotsman, ‘Grandees do Battle for the Soul of
Christian Salvesen’, The Times. Most articles presented it as a clash between the old and the
new (Scotsman 4 Dec 1996; The Times 4 Dec 1996; Financial Times 18 Dec 1996). Much was
made of the contrast between Sir Gerald Elliott, 72, who had a distinguished record of public
service in Scotland and had worked for the company for 40 years, and the younger and brasher
Sir Alick Rankin, who was not a Salvesen, but, as chairman of Scottish and Newcastle
Breweries, was as much at home in the City as in Edinburgh. The clash was presented as one of
generations, of styles, and, not least, of business goals. The traditions of a historic family firm, it
was widely suggested, were being forced to give way to the demands of modern business.
‘Family firms’ were part of the old and journalists relied on the label to create an image
in the minds of their readers. What is indeed striking is that better-informed commentators were
at pains to point out complexities. Sir Gerald, after all, had been chairman at the time the
company was floated and had recruited both the current chief executive and Sir Alick himself.
By 1996, no Salvesens worked for the company; two, however, still sat on the board, which
was, apparently, united behind the demerger proposal. Nor was it clear how family shareholders
viewed Sir Gerald’s campaign. Some, it was rumoured, were less than happy with the
company’s rather lacklustre performance; all stood to benefit from the extra dividend. When
one family member spoke of collectively assessing whether ‘these proposals are the best for the
family’, it was by no means clear all would place the same value on preserving the company’s
unity (Scotsman 4 Dec 1996).
By coincidence, shortly before these events, work was completed on a history of the
family, the Slekten Salvesen (Salvesen 1995). ‘Slekten’ is a Norwegian word most easily
translated as clan, and the book traces the family back to the 1550s and the small town of
Mandal in southern Norway. Ten sides, however, cover the first nine generations with the bulk
of the book, some 320 pages, devoted to the period after 1800. A brief profile is provided of all