Lawrence Nicholson | The similarities of family business and political parties

There is the tendency to see the world through the lens of what occupies our thoughts, such as our areas of research or expertise.

This is a component of a phenomenon referred to as cognitive bias. This bias reared its head in the aftermath of the recent general election in Jamaica. Viewed through the lens of family-owned businesses, or FOBs, the ebbs and flows of the politicking and the political manoeuvrings provided interesting insights.

Two major areas emerged from viewing politics through the lens of FOBs, viz, the impact of FOBs in influencing the direction of governments across the world and the similarities between FOBs and political parties. The conclusion, Jamaica needs the maturity of both to achieve vision 2030.

FOBs have long been part of the political landscape of countries across the globe. There is no shortage of documented connections between family businesses and politics in countries such as Italy, Chile and the United States.

In a 2024 article, Marcelo Ortiz posited that “from Italy’s Berlusconi, to the US’s Kennedy family, to Chile’s Matte ... wealthy business families have not only been part of the economic elite, but are also political powerhouses”.

In recent years, family businesses and political connections have been very visible, led by the Trump and Murdoch families, which have been dictating the direction of political power in the United States.

Given the documented backlash and the level of fallout that can be experienced by FOBs aligned to political parties across the globe, there is no benefit to anyone with the mentioning of the known FOBs-political parties connection in Jamaica.

POTENTIAL RISKS

Don’t be fooled, political involvement of FOBs is not for mere altruistic purposes. Ortiz stated that the political ambitions of business dynasties are multifaceted, including access to government contracts and resources. Also, alignment with political parties goes beyond personal benefit, and extends to being able to influence policies that benefit the family and the business.

While there are benefits from close relationships between FOBs and political parties, there are potential risks. These include the potential for corruption, which can damage business, party and country. Despite the risks, the continued partnership between FOBs and political parties might lie in the similarities they share.

One of the working definitions of a family-owned business is as an entity that is owned and/or managed by more than one member of the same family. The Britannica defines a political party as a group of persons organised to acquire and exercise political power. This means that both FOBs and political parties exist to address the affairs and concerns of a group of people.

FOBs are managed on behalf of the family, while political parties are formed to seek the authority of voters to manage public entities on behalf of the state. While managers of FOBs are usually selected by family members, leaders of political parties are usually elected by their peers.

The selection of leaders of FOBs is guided by governance structures, such as family council, family assembly, advisory boards and board of directors. The process of choosing the leaders of political parties is governed by their internal governance structures, the interplay of actions of other political parties, elections, and public opinion.

Other similarities between FOBs and political parties include the seeming obsession with power (personal and political) and the reluctance of leaders to relinquish leadership, and having a personality-driven leadership structure. On the question of leadership, both FOBs and political parties are faced with the challenge of navigating this complex issue.

FOBs and political parties are leadership-centric; most activities are driven by the leaders or under the instructions or directives of the leader. This leadership-centric feature means that resignation from leadership is not the norm, even in cases where the capacity to lead effectively has been diminished.

It also means that long-term leadership succession planning is either lagging or non-existent, with no term limit. Succession plan is conflated with replacement plan, where leaders are replaced when forced to because of different reasons.

The history of changes in the leadership of political parties in Jamaica have come via bitter rivalry among those who grapple for the top job. This is no different in FOBs that are not guided by good governance practices.

FOBs and political parties are committed in their focus on leaving a legacy and long-term continuity. This is usually accomplished through a reliance on leadership and the reliability of family-based structures. For example, political parties rely on their committed base to get elected, while FOBs usually rely on committed family members to drive success. The absence of a reliable family base can lead to the demise of FOBs and political parties.

Both FOBs and political parties use different strategies to retain a reliable base. FOBs offer benefits to family members, which are not offered to non-family members, and employ family members in positions for which they are not qualified. Nepotism has long been listed as part of the dark side of FOBs.

Similarly, supporters of political parties usually enjoy benefits beyond those given to non-supporters. There have been cases of supporters been employed in areas for which they are devoid of the requisite qualifications.

As the sun rises each day, it is certain that both the leaders of FOBs and political parties are willing and available to swear on a stack of dictionaries in denying that there are differences in treating family (supporters) and non-family members (non-supporters). However, this does not change the lived reality of those who have been rewarded and those who have been the victim of nepotism.

FOBs and political parties play important roles in a country’s development. FOBs at the micro level and political parties at the macro level. Many are of the view that the tendency for FOBs to be internally focused does not bode well for a country’s economy.

However, the data does not show this to be the case for Jamaica and other countries. There is also the view that political parties are internally focused, meaning that the affairs of the party are prioritised over the affairs of the country.

One is hard pressed to deny the truthfulness of claim, based on the eye test over the years.

As we move forward as a country, the call is out for both FOBs and political parties to be outward-looking and work for the benefit of the country. While there are some fine examples of good employment practices among FOBs, others must adopt a merit-based approach in treating their employees.

Political parties must be deliberate and transparent in adopting a more equitable approach. Political parties exist to serve both supporters and non-supporters. The house slaves versus field slaves, and the handouts-for-favour mentality must stop.

FOBs and political parties need to adopt a new paradigm. Vision 2030 awaits.

More anon!

Lawrence Nicholson, PhD, is a senior lecturer at the Mona School of Business & Management, University of the West Indies, author of Understanding the Caribbean Enterprise: Insights from MSMEs and Family-Owned Businesses and a former director of the RJRGLEANER Communications Group.

lawrence.n.08@gmail.com