Traditional families lose grip on enterprises they created

Salina Amorini is another casualty of the changing times at Swiss firms Keystone

The former chairman and chief executive of SGS (Société Générale de Surveillance), Elisabeth Salina Amorini, who was kicked off the board of directors on Thursday, wants to challenge her opponents in court.

Salina Amorini, the great-grand daughter of the company’s founder, accepted her defeat at the company’s annual general meeting on Thursday, after shareholders voted a massive majority to oust her in a secret ballot. “I accept the decision, but there will be no farewell party,” she said at the meeting in Geneva.

However, on Friday her lawyer announced that she would “probably” uphold two court challenges filed at the end of last year against her enemies. Salina Amorini’s successor as chairman, Max Amstutz, had tabled the motion for her ousting.

Salina Amorini, who had served on the multinational’s ruling body for 19 years, is the last member of the traditional families behind SGS, the world’s leading goods inspection company. Her great-grandfather was Jacques Salmanovitz, who saw an opportunity for quality and quantity controls in growing trade flows and founded SGS in 1878.

Today, SGS has over 1,000 offices and laboratories in over 140 countries, an annual turnover of more than SFr2 billion, and a workforce of 30,000 employees. But its business fortunes were in decline throughout the 1990s – when Salina Amorini headed the company.

Business commentators said on Friday that Salina Amorini’s fate mirrored that of other traditional families at the helm of enterprises created by their ancestors.

“Old money in Switzerland – money that’s vested in founding families – finds it difficult to adapt to modern times when business decisions are taken much faster than 10 or 20 years ago”, explains Klaus Stöhlker, a consultant.

Two years ago, Salina Amorini came under pressure from distant family members who had no interest in SGS other than to stop the decline of their shares’ value. When many of them sold their shares, business experts saw SGS as ripe for a takeover.

Salina Amorini hired Amstutz and stepped down as chairman, but remained a member of the board. Amstutz’s new management team succeeded in stopping the company’s decline, but Salina Amorini fell out with her colleagues on the board, who she accused of withholding information.

Other companies have experienced similar conflicts between “old” and “new” management factions over the recent past.

Sulzer, one of Switzerland’s oldest technology corporations, was shaken by a takeover battle last month. And at Kuoni, Switzerland’s leading tour operator, the Kuoni and Hugentobler foundation, a family concern, is fighting a legal battle to resist losing its voting power by the board of directors.

The same could be happening with pharmaceutical giant Roche, Stöhlker told swissinfo. Roche allowed its chief rival, Novartis, to pick up 20 per cent of Roche shares this week.

“Until now, the old family hasn’t shown the leadership power that the market requires”, Stöhlker says, referring to the branches of the Hoffman family which owns a majority of Roche shares.

Stöhlker says the changing of the guard at some leading companies came later in Switzerland than elsewhere, but that it was part of a wider European phenomenon. “Germany will follow the process soon; companies will have to open up, and we will see many management in-fights.”

by Markus Haefliger