A family owned business going through a generational change becomes vulnerable, if no timely decisions are made for ensuring a smooth transference of responsibilities.
The ways to handle such change and ensure sustainable business development were discussed at a conference organized by the Swedish Chamber of Commerce in Lithuania, COBALT Law Firm and the Baltic Institute of Corporate Governance (BICG) on November the 5th in Vilnius.
“Many family owned businesses created in Lithuania, Latvia and Estonia after the restoration of independence more than 20 years ago are now going through generational changes and need to be aware of the ways to solve any related problems, if the value of their business is to be preserved,” says Rytis Ambrazevičius, Vice President of the BICG and one of the speakers of the conference.
The themes discussed at the event included such topics as how to avoid the shareholder disputes, how can a professional investor be useful, and why is it beneficial to implement best corporate governance practices and create boards with independent board members.
“Application of good corporate governance practices is only in its initial stages in Lithuania. Many business owners believe still that their own personal commitment to the company is enough, and that no other experts are necessary. But generational change is one of the times when the need to have a strong governance structure and attract external talents becomes exposed. Creating a board with independent members who are highly competent in different areas important for the company and compliment the competencies of the manager, directly contributes to raising the value and improving the sustainability of a business,” says Mr Ambrazevičius.
By implementing the best corporate governance practices, a business becomes better equipped to make the best strategic decisions, manage risks, attract financing and improves not only own transparency and reputation, but also the general business environment.
“Increased implementation of the best corporate governance in a country helps grow investors’ confidence and therefore the entire economy”, says Mr Ambrazevičius.
He emphasizes that the first things to be done when creating a board are to clearly define the goals of the shareholders and the external competencies that a business wants to attract.
“Independent board members need to agree with the fundamental direction of the company and support the vision of the owners, but they also must be able to openly express their professional opinions that the owners sometimes might not want to hear,” says Mr Ambrazevičius.
BICG is a non-profit and non-governmental organization missioned to deliver value to its stakeholders by promoting global competitiveness of enterprises in the Baltics and encouraging the businesses to adopt leading corporate governance practices.
During the conference, Paulius Martinkus, president of the BICG, presented Dr Irmantas Norkus, Managing Partner of the COBALT law firm, with a BICG National Corporate Member certificate for the COBALT Law Firm.
Rytis Ambrazevičius, Vice President of the BICG, discussed why is it beneficial to implement best corporate governance practices and have independent board members.
The conference was organized by the Swedish Chamber of Commerce in Lithuania, COBALT Law Firm and the BICG.
