Getting a Grip on Holding Companies
Family Business Magazine Article Citing John Ward
Philip Clemens, retired chairman of the 125-year old Clemens Family Corporation pork-processing company in Hatfield, Pa., knows firsthand that a holding company structure can play a pivotal role in the life of a family enterprise.
... Clemens says forming a holding company was "one of the crucial steps in our reorganization from a family business to a business family" -- one that puts the needs of the business ahead of family members' personal interests. Twenty years ago, the Clemens family enterprise, known for its Hatfield and Farm Promise brands, faced a precarious financial situation that appeared to threaten the company's future existence. An action plan was developed that included the formation of the holding company.
Clemens, who was a key architect of the turnaround, says the restructuring played a critical role in the repositioning of the business. The move opened the door to diversification of the enterprise to better handle business-cycle issues, according to John Ward, clinical professor emeritus of family enterprise at Northwestern University's Kellogg School of Management. The name of the holding company, The Clemens Family Corporation, inspired all family members to feel a greater connection to the firm, Ward wrote in a case study on the Clemens business.