Gough, Gough & Hamer, which operates transport, machinery and engineering businesses in New Zealand and Australia recently appointed Ben Gough and Alex McKinnon to its board. Both are direct descendants of Tracy T Gough, who founded the company in 1929 (grandson and great-grandson respectively). Both are in their early 30s and successful in their own right, Ben as managing director of Tailorspace Investments, company specialising in commercial property investment, development and management, and Alex as an investment manager for Beijing-based Mahon China Investment Management, merchant bank and corporate advisory company. They discuss their appointments, the first family members in over 20 years to be appointed to the board.
‘Daunting’ is probably the best word to describe our first board meeting. Comparing our age and experience with the other members of the board made it pretty intimidating experience, but it was the board who were keen to have family members back again, so they were most accommodating.
There is probably perception that family companies are the minority, when in fact 60 percent of the world’s businesses are family controlled, so having family members on board is more the rule than the exception.
While it is 20 years since the Gough family has had board representation, they have always had close association with the business, but not to the strategic level that our appointments represent.
Probably one of the key pieces of advice that we have taken into our new positions is the adage that family members need to look at the family business through telescope not microscope. It is too easy to focus on the little problems that may affect the family rather than on the big picture. You have to let the company thrive rather than have family dictating on management level.
Family members tend to wear their hearts on their sleeves more than independent board members, which can mean the line between governance and operations becomes blurred. Aspects like how quickly the company pays its bills and how the company treats its staff and customers are important, but we probably take these factors more personally than independent board members.
Families tend to grow faster than family businesses meaning profits can fail to keep up with family growth. Family expectations, therefore, have to be managed. It also means that family members need to be given opportunities, just as we have, to create our own wealth outside the family business and to encourage independence rather than dependency on the company.
While we have only been to three board meetings, we are acutely aware that continuity and succession are two of the biggest challenges family-owned business faces. The key to successfully achieving both is planning the process.
Continuity challenges us by keeping the businesses successfully trading through all stages of the business cycle and in that we are fortunate in the calibre of the board as there are few business situations that they have not encountered.
We have bigger role to play in succession. It is our responsibility to repay future generations with what we learn now and to pass on to family members what we have learned. The Gough family group is not big, with half living overseas and most of the rest still in Christchurch. We will be looking to have quarterly meetings with them and to keep in contact with those overseas.
The first few months have been challenging. Being confident that we had something to add around the table with such experienced directors was an early hurdle. Coming to grips with the depth of investigative research and analysis that was required was another.
We must continue to look to the future. Relatively speaking we are young for these positions, but the appointments ensued from company decision to ensure that the “family” values, embraced by Goughs since its inception, remain to the fore as the dealership looks to the future and its 100-year milestone.
