Caleb E. White
In the wake of the January 6 riot at the US Capital, it has been reported that the heiress to the Publix Super Market fortune, Julie Jenkins Fancelli, had funded the lion’s share of the costs related to the preceding rally in Washington, DC’s Ellipse. Responding to shoppers’ backlash to what people assumed about the family’s connection to Publix, a spokeswoman for the supermarket chain released a statement saying that “Ms. Fancelli isn’t involved in the company’s business operations and doesn’t represent the company in any way.
We appreciate the Publix dilemma. Publix is an employee-owned company, with 80% of its shares held by past and present employees of the company. Yet descendants of founder George W. Jenkins own the remaining 20%. While it may be accurate to state that Ms. Fancelli isn’t involved in the company’s business operations, it is much harder to state categorically that she doesn’t represent the company in any way. Working across this boundary ahead of time—instead of letting sleeping dogs lie—can sometimes help mitigate the issues that arise when members of a family may no longer be aligned with the business’ vision, customer base, and brand. Publix’s attempt to separate operations from ownership, even at 20%, demonstrates how hard it can be. Certainly, those who tweeted “#BoycottPublix” saw a connection between the profits of the supermarket chain and an heiress in the family owning 20% of its shares.
In our decades of experience working with multigenerational family businesses, the connection between family owners, including former owners, and the company’s brand and public image are often linked, both in fact and in the public perception. At times, this may be manifested by family owners/founder descendants who retain influence via their board, to persuade non-family leaders to preserve the founding family’s mission, values, and legacy. On the Publix website, there remain numerous pictures of founder George W. Jenkins and his “six lessons,” still key to Publix’s values and culture today.
For family businesses where ownership may include family members with little or no connection to the operations of the business, the temptation might be for management to seek limited or no affiliation with the family or ownership group. A generation or two of dormant or passive ownership from a minority group may justify this thinking… for a while. This inclination may be based on a perceived risk that such a connection might negatively affect the business, should a family member or descendent become subject to public scandal or criticism. This is particularly true when the actions of a family member are high profile or likely to be subject to public scrutiny and an association may do damage to the company’s image or brand. In our experience, however, business leadership, whether management or the board, overlooks owners at its peril. Instead, fostering reciprocal systems and structures that build productive bridges between the business and its owners acknowledges the reality that there is mutual dependence between the corporate behavior of a company and the individual behaviors of owners, including, or even especially, family owners. Rather than the avoidant approach of creating distance between themselves and family owners or descendants, alternatively, companies can benefit from attempting to embrace the connection among family, owners, and the business through more interactive governance structures, regular communication, and engagement. This can take real work. Yet by establishing a set of norms and accepted behaviors for each of the stakeholders in a family enterprise, over time, the benefits to all accrue, and businesses can better safeguard themselves against the disruptions a PR crisis could cause.
Preserving and protecting a company’s brand isn’t the sole responsibility of management, whether they be family or non-family—it is a responsibility best taken up by the family as well. One helpful step in this direction is careful and deliberate planning to set up governance structures that acknowledge and systematically work through the ambiguity that may arise between family, owner, and business matters. In instances where family members remain owners or are in management, these three systems naturally overlap, creating a potential for confusion or unmet expectations.
One example of a useful tool is the crafting of an agreed set of norms and interactions across groups resulting in a family constitution. Put simply, a family constitution:
- Acts as a statement of the principles that outline the family commitment to core values, vision, and mission of the business
- Defines the roles, composition, and powers of key governance bodies of the business: family members, shareholders, management, and board of directors
- Helps build and foster a mutual understanding of the rights and responsibilities of all persons who have an interest in the family’s wealth, which is key to its preservation and growth
- Formally (though not a legally binding agreement, a constitution is often signed by each member of the family to signify agreement) sets rules for the family’s governance, power sharing, communication, and problem-solving—and outlines expectations, including a code of conduct, that family members have for one another
- Should ideally be a living document, regularly reviewed as a family begins a generational or other significant transition
For family members, a family constitution acts as a guidebook for the expression of the accepted values that drive behaviors and actions across family and business. Critically, however, the most important aspect of creating a family constitution is actually the process of engaging family members before, during, and after its development. It is during this education and engagement process that the interdependency between the business, its owners, and more extended family members can be explored and understood—the potential risks alongside the opportunities. A family constitution must not be a static document, but one that should regularly be refreshed to incorporate and respond to transitions in the family, ownership group, and business as well as to changes in the world at large. For the business, the family constitution, and engagement around it serve as additional supports to traditional business and shareholder governance structures. The family constitution’s influence often reaches beyond the family—it can act as a building block and the foundation for values and behaviors expressed in the policies and practices of the business as well as how it shows up in its community as a philanthropic partner. Working together, strong governance and engagement in each of the family, owner, and business arenas strengthens the overall enterprise, bolstering the collective system from impact if one area experiences a challenge or crisis.
We don’t know the inside story of Publix—what governance structures are in place, whether the stakes were fully appreciated or engagement was attempted. Ideally, and in retrospect, we assert that the current tensions between some of Publix customers and its brand image may have been more easily managed if the connection between founding family owners, even those with a minority share, and the company’s brand could have been better understood. Within the Publix governance structures, forging a more deliberate connection punctuated by steady communication and engagement may have brought a different result; we have been witnesses to the bridging of deep divides, and know it is possible. In the best case, making the owners’ code of conduct explicit early on, may have made opting in or out an affirming experience. In any case, governance that considers risk holistically across a group of owners can not only put in place a response that acknowledges owners do represent the company but also recognizes the reciprocal relationship—providing returns to owners’ capital as owners recognize that risk comes in many forms. Proactively addressing this relationship and the potential damage to it including reputation and brand, can yield mutual benefit for both owners and the business and mitigate the risk of misunderstood or misaligned perspectives.
 Crowley, James. “Publix Distances Itself From Heiress Julie Jenkins Fancelli After Report of Jan. Rally Funding,” Newsweek. January 30, 2021. https://www.newsweek.com/publix-distances-itself-heiress-julie-jenkins-fancelli-funding-jan-6-capitol-riot-1565600.