Our Challenges
EFB’s challenges for a sustainable, competitive, and entrepreneurial European economy
1. Facilitate the intergenerational Transfer of Business
Possibly the greatest challenge for the family business, is transferring the ownership and/or management of the business to the next generation. The European Commission estimates that around 480.000 companies are transferred each year. In addition, the Commission also estimates that over 2 million jobs are affected by these transfers.
It is undisputable that there is a lot at risk when family businesses are passed on from one generation to the next, therefore, it is essential that policy makers at both the national and European level create framework conditions to ensure smooth transitions.
2. Promote the recognition of Family Businesses
European Family Businesses is of the belief that the current statistical understanding of the business environment is incomplete. Currently, business statistics in Europe are very much focused on the size of the company, be it number of employees or turnover. Indeed, the European Union’s SME definition follows this logic.
By completing the statistical understanding of Europe’s businesses through the dimension of ownership, policy makers and wider stakeholders would be able to better formulate policies that would support the growth and prosperity of European business, and lead to a true knowledge-based economy.
With better framework conditions for family businesses in Europe, thousands of family companies, often deep-rooted in local communities, could be maintained for the long-term, through the intrinsic use of patient capital and responsible ownership which is at the heart of the family business in Europe.
3. Ensure the right of Business Families to choose their own Governance
EFB believes that at the EU level, no corporate governance measures regarding unlisted companies should be taken. On a voluntary basis, based around the promotion of best practices and recommendations, unlisted companies can develop their own governance structure. There is no need for compulsory codes or measures to regulate the governance of unlisted companies.
4. Correct the Debt Bias to strengthen the equity base
Fiscal systems in Europe tend to favour debt over equity, creating incentives for higher leverage for firms. Therefore, it is essential that the framework conditions in Europe, strengthen the equity positions of companies.
Whilst facilitating the responsible use and access of debt is crucial for businesses, equity financing should benefit from the same fiscal treatment as debt. This would lead to stronger capitalization of businesses with equity in the real economy and hence provide more capacity for sustainable long-term investments and job creation.
5. Promote Family Business Specific Education
European Family Businesses is of the opinion that developing ownership education is critical to give key stakeholders a better understanding of the responsibilities and options that owners of companies have.
Entrepreneurship education should also include specific family business issues such as succession and family governance to better prepare future entrepreneurs to successfully run their businesses. It is crucial that ownership education is promoted as an accepted topic next to business education.
6. Protect your Privacy and your Data
The EU Commission has facilitated the access to Business Owners’ Data through new anti-money laundering legislation (AMLD). In many countries, owners’ data are now accessible to the public; these datasets have already been hacked and there is a constant risk of large-scale hackings.
EFB is concerned that the Ultimate Beneficial Ownership (UBO) registers could expose many vulnerable individuals to risks of fraud kidnapping, blackmail, violence or intimation. The directive makes provisions, in ‘exceptional circumstance,’ for Member States to provide an exemption from such access to all or part of the information on a case-by case basis.
7. Transform the Green Deal by Leadership
The European Green Deal is the most ambitious project ever undertaken to reverse the effects of man-made climate change. Family businesses, as the producers of goods and services, as consumers of energy and raw materials, and as a major employer, want to make the Green Deal work for all.
We must avoid a disjointed and uncoordinated implementation of the Green Deal. This will distract the EU from its goals of providing growth, prosperity and opportunities for its citizens and would be a major step backwards for Europe and the world. EFB maintains that only a market-based Green Deal has the potential to establish Europe as a solution-finder for the human problem of climate change
EFB wants to avoid a disjointed and uncoordinated implementation of the Green Deal.
8. Support the growth of mid-caps
Mid-caps, mostly run and owned by families, are our regional and national champions. They are key providers of stable employment and are often found in more rural areas and the regions, not just in the hubs surrounding the capitals and main industrial areas. They have usually been in these regions for generations through long-term commitment and resilience adding to the social fabric through employment, as well as philanthropy.
Mid-caps have long been neglected in EU legislation, with their status often unclear or ignored. This means that they often lack easy access to support measures. EFB wants the creation of a new category in the EU specifically recognizing Mid-caps to develop a better reflection of the business ecosystem.
EFB’s challenges for a sustainable, competitive, and entrepreneurial European economy
1. Facilitate the intergenerational Transfer of Business
Possibly the greatest challenge for the family business, is transferring the ownership and/or management of the business to the next generation. The European Commission estimates that around 480.000 companies are transferred each year. In addition, the Commission also estimates that over 2 million jobs are affected by these transfers.
It is undisputable that there is a lot at risk when family businesses are passed on from one generation to the next, therefore, it is essential that policy makers at both the national and European level create framework conditions to ensure smooth transitions.
2. Promote the recognition of Family Businesses
European Family Businesses is of the belief that the current statistical understanding of the business environment is incomplete. Currently, business statistics in Europe are very much focused on the size of the company, be it number of employees or turnover. Indeed, the European Union’s SME definition follows this logic.
By completing the statistical understanding of Europe’s businesses through the dimension of ownership, policy makers and wider stakeholders would be able to better formulate policies that would support the growth and prosperity of European business, and lead to a true knowledge-based economy.
With better framework conditions for family businesses in Europe, thousands of family companies, often deep-rooted in local communities, could be maintained for the long-term, through the intrinsic use of patient capital and responsible ownership which is at the heart of the family business in Europe.
3. Ensure the right of Business Families to choose their own Governance
EFB believes that at the EU level, no corporate governance measures regarding unlisted companies should be taken. On a voluntary basis, based around the promotion of best practices and recommendations, unlisted companies can develop their own governance structure. There is no need for compulsory codes or measures to regulate the governance of unlisted companies.
4. Correct the Debt Bias to strengthen the equity base
Fiscal systems in Europe tend to favour debt over equity, creating incentives for higher leverage for firms. Therefore, it is essential that the framework conditions in Europe, strengthen the equity positions of companies.
Whilst facilitating the responsible use and access of debt is crucial for businesses, equity financing should benefit from the same fiscal treatment as debt. This would lead to stronger capitalization of businesses with equity in the real economy and hence provide more capacity for sustainable long-term investments and job creation.
5. Promote Family Business Specific Education
European Family Businesses is of the opinion that developing ownership education is critical to give key stakeholders a better understanding of the responsibilities and options that owners of companies have.
Entrepreneurship education should also include specific family business issues such as succession and family governance to better prepare future entrepreneurs to successfully run their businesses. It is crucial that ownership education is promoted as an accepted topic next to business education.
6. Protect your Privacy and your Data
The EU Commission has facilitated the access to Business Owners’ Data through new anti-money laundering legislation (AMLD). In many countries, owners’ data are now accessible to the public; these datasets have already been hacked and there is a constant risk of large-scale hackings.
EFB is concerned that the Ultimate Beneficial Ownership (UBO) registers could expose many vulnerable individuals to risks of fraud kidnapping, blackmail, violence or intimation. The directive makes provisions, in ‘exceptional circumstance,’ for Member States to provide an exemption from such access to all or part of the information on a case-by case basis.
7. Transform the Green Deal by Leadership
The European Green Deal is the most ambitious project ever undertaken to reverse the effects of man-made climate change. Family businesses, as the producers of goods and services, as consumers of energy and raw materials, and as a major employer, want to make the Green Deal work for all.
We must avoid a disjointed and uncoordinated implementation of the Green Deal. This will distract the EU from its goals of providing growth, prosperity and opportunities for its citizens and would be a major step backwards for Europe and the world. EFB maintains that only a market-based Green Deal has the potential to establish Europe as a solution-finder for the human problem of climate change
EFB wants to avoid a disjointed and uncoordinated implementation of the Green Deal.
8. Support the growth of mid-caps
Mid-caps, mostly run and owned by families, are our regional and national champions. They are key providers of stable employment and are often found in more rural areas and the regions, not just in the hubs surrounding the capitals and main industrial areas. They have usually been in these regions for generations through long-term commitment and resilience adding to the social fabric through employment, as well as philanthropy.
Mid-caps have long been neglected in EU legislation, with their status often unclear or ignored. This means that they often lack easy access to support measures. EFB wants the creation of a new category in the EU specifically recognizing Mid-caps to develop a better reflection of the business ecosystem.
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