World's 500 largest family-owned businesses grow revenue by 10% amid ongoing global economic slowdown (2023)

  • The 500 largest family businesses generate 8.02 tonnes USD and employ 24.5 million people in 47 jurisdictions
  • 17 family businesses in Southeast Asia on the list
  • More needs to be done to close the gender gap as women hold only 23% of board seats

The world's 500 largest family businesses are critical to health and are growing faster than the global economy. Together, they generate US$8.02t in revenue and employ 24.5 million people worldwide in 47 jurisdictions, high enough to be the third largest national economy by revenue, behind only the US and China. These and other findings were published inEY και University of St.Gallen Family Business Index 2023, which is a ranking of the world's 500 largest family-owned companies by revenue, and is published every two years.

Longevity and stability continue to be key elements among companies included in the 2023 index, with more than three-quarters (76%) having been around for more than 50 years and almost a third (31%) having been around for over a century of life. This is further reinforced by their board structures, with almost a quarter of all board positions (23%) held by family members and almost half (45%) having family members as CEOs.

While the majority of companies in the index are located in Europe (46%), the US is the top single jurisdiction (24%). Overall, exactly half of all companies in the index are located in Europe, the Middle East, India and Africa (EMEIA), with 34% in the Americas and 16% in Asia Pacific. The contribution of Asia and the Pacific has grown steadily since the first edition of the index in 2015, from 12% to 16% this year. Meanwhile, when it comes to industrial sectors, consumer-based family businesses lead the index (37%) thanks to their dominant share in America. This is followed by advanced manufacturing and mobility companies (29%) as this sector is the leader in EMEIA countries and the Asia-Pacific region.

17 family businesses in Southeast Asia on the list

According to the study, 17 Southeast Asian family businesses made the top 500 list, including Indonesia (2), Malaysia (4), the Philippines (5), Singapore (2) and Thailand (4) . Together, they employ nearly 850,000 people and the average age of board members in these family businesses is 62.

Low Bek Teng, Head of Family Business EY Asean, says:

“Having board members with an average age of 62 highlights the need for Southeast Asian family businesses to consider board renewal and the transition to a younger generation – and this needs to happen in the coming years. As family businesses grow in size and complexity, a good succession plan becomes imperative. There have been cases where family businesses have had problems transitioning to the next generation due to management challenges or internal conflicts. Therefore, early implementation of succession planning and regular communication to manage differences will go a long way in ensuring the long-term survival of the company.

“At the same time, the current economic challenges of geopolitical risks, rising inflation and interest rates mean that family businesses may need to take immediate and additional steps to protect the value of their assets and investments. They should understand the risks involved and how each of these risks can affect their business. Bringing the next generation to work and learn alongside the current board and management will help the younger team better appreciate the intricacies of the business.”

More needs to be done to close the gender gap in boards

Although successful family businesses are recognized as flexible, innovative and focused, there is still a long way to go to achieve gender equality. Globally, about 6% have a female CEO and women hold only 23% of all board positions. North America and Europe stand out in the index with female CEOs, but again only around 7%. When it comes to the distribution of board seats among family members, Europe leads the way with women occupying 25% of family board seats, well above the global average of 20%.

Helena Robertsson, head of global family businesses at EY, says:

“Family businesses continue to demonstrate an impressive ability to adapt quickly and I commend them for their continued transformation and innovation. As we anticipate a possible slowdown in global economic growth next year, the long-term outlook and desire of these companies to build on their legacy will be key drivers in maintaining resilience and ensuring a strong succession. I particularly look forward to seeing the next generation further focus on investing in technology and diversifying the board, while maintaining a significant contribution to the global economy.”

Thomas Zellweger, professor from the Center for Family Business at the University of St.Gallen, says:

“The overall composition index is stable, with just 7% new entrants this year, which demonstrates the resilience of family businesses. The growing importance of Asia-Pacific companies is also impressive and is an indication of the financial power these family businesses wield in the region. It will be interesting to watch how these long-established companies continue to adapt and thrive in the light of social, environmental, economic and technological changes. The role of the next generation in meeting these challenges will be absolutely critical."

-ends-

Notes for editors

O EY-u

EY exists to build a better world of work, helping to create long-term value for clients, people and society and building trust in the capital markets.

Backed by data and technology, EY's diverse teams in more than 150 countries deliver trust through assurance and help clients grow, transform and operate.

Working across assurance, consulting, legal, strategy, tax and trading, EY teams ask better questions to find new answers to the complex issues facing today's world.

EY refers to a global organization and may refer to one or more member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection law is available at ey.com/privacy. EY member firms do not practice law where prohibited by local law. For more information about our organization, visit ey.com.

This press release is issued by Ernst & Young Consulting Sdn Bhd, a member of the global EY organization.

About the EY family business

As trusted advisors to ambitious family business owners, including 92% of the world's top 500 family businesses, EY teams have the experience and knowledge to help the whole family business – the families, their family business and their family office – seek opportunities for growth while maintaining values ​​and building family heritage. Drawing on more than 100 years of experience supporting the world's most entrepreneurial families, EY Family Enterprise experts are experienced in identifying and optimizing the factors that influence the growth and longevity of family businesses, the preservation of wealth and culture, and the consolidation of multi-generational legacies. Visit ey.com/familyenterprise.

O EY Private

As Consultants to ambitious™, EY Private's experts have the experience and passion to support private companies and their owners to unlock the full potential of their ambitions. EY Private Teams offer a variety of insights drawn from EY's long history of working with business owners and entrepreneurs. These groups support the full range of private businesses, including managers and private equity investors and the portfolio companies they finance, business owners, family businesses, family offices and entrepreneurs. Visit ey.com/private.

Top Articles
Latest Posts
Article information

Author: Neely Ledner

Last Updated: 02/08/2023

Views: 6086

Rating: 4.1 / 5 (62 voted)

Reviews: 85% of readers found this page helpful

Author information

Name: Neely Ledner

Birthday: 1998-06-09

Address: 443 Barrows Terrace, New Jodyberg, CO 57462-5329

Phone: +2433516856029

Job: Central Legal Facilitator

Hobby: Backpacking, Jogging, Magic, Driving, Macrame, Embroidery, Foraging

Introduction: My name is Neely Ledner, I am a bright, determined, beautiful, adventurous, adventurous, spotless, calm person who loves writing and wants to share my knowledge and understanding with you.