(8 of 10)
A couple of years ago, the descendants of banker Julius Baer--more than 100 of them--gathered at a Zurich restaurant for a reunion of a remarkable family. Not only does it own a controlling stake in the 112-year-old Swiss bank Julius Baer Group, which manages about $80 billion in assets, but its members still run it too. In May, Thomas Baer, a grandson of Julius', will retire as chairman and hand the post to his nephew Raymond Baer, 43.
Thomas Baer says it became clear five or six years ago that Raymond was the clan's best young leader. "The big danger of family companies is that the older generation cannot find the right moment to hand over the reins," says Thomas. He is not only giving up the chairmanship but also relinquishing his seat on the board to his son and will have more time to spend at his Tuscan vineyard.
About 30 members of the family are involved in key decisions at the bank. They are signatories to a family shareholders' pooling agreement meant to ensure that control of the bank stays in Baer hands. It's a practical form of family governance that was first drawn up in 1974, when the bank switched from being a partnership to a limited-liability stock corporation.
The family allows its members to work at the bank only "if there's a reasonable chance of reaching the top," says Thomas. Once the family has decided, big appointments still need to be approved by the board, most of whose directors are not family members. But Thomas says there are huge advantages in having family involved. "If it's your money and your name is on the door," he says, "it's to be expected that you act in a more responsible manner."
Like most banks these days, Baer is focused on cutting costs and recently took the unusual step of laying off 50 workers.
Mohn BERTELSMANN
The family's privately held, worldwide media conglomerate, based in GUTERSLOH, GERMANY, includes publisher Random House, a majority stake in TV network RTL and the BMG music group
Annual Sales: $18 billion
Reinhard Mohn inherited the modest German publishing house that his great-grandfather founded in 1835, and he turned it into a global media giant called Bertelsmann. Today that firm owns book publisher Random House, the BMG music group and a majority stake in the European TV network RTL, among other properties. Mohn, 81, stepped back from active management a decade ago, but the company's transition to outside executives has not been smooth.
Bertelsmann stock is not publicly listed, and Mohn and his second wife Liz, 61, control the firm through a holding company--and keep a watchful eye on management. Three years ago, supervisory board chairman Mark Woessner left after a falling-out with the Mohns, and last July the family ousted celebrated CEO Thomas Middelhoff, who had spent billions trying to propel Bertelsmann into the digital era, committing the company to a public offering in 2005 that it is trying to wriggle out of.