The performance of publicly traded Canadian family-controlled
companies consistently exceeds that of widely held
companies
MONTREAL, June 20,
2022 /CNW/ - National Bank of Canada released today its Family Advantage -
Spring 2022 report, which helps to better understand the
distinctive characteristics of family-owned companies through an
analysis of 44 Canadian corporations under family or founder
control. The report demonstrates superior long-term performance of
publicly traded Canadian family businesses.
This year, the publication features the perspectives of three
business leaders of flagship Canadian companies on the global
stage: Dani Reiss (Canada
Goose), Karinne Bouchard
(Alimentation Couche-Tard) and Jean, Antoine and Frédéric
Chagnon (Lallemand). The publication also includes two
international perspectives on family-controlled businesses, a
global investor's perspective from Arjun
Khullar (GIC) and European insights from Charles
Paris de Bollardière
(TotalEnergies, 2009-2021).
Highlights:
- The report features the NBC Canadian Family Index (hereafter,
total return), calculated by S&P Dow Jones Indices, which
tracks and measures the performance of Canadian companies
controlled by families and founders against the S&P/TSX
Composite Index (hereafter, total return), the leading Canadian
stock market index.
- From June 2005 to June 2021, the NBC Canadian Family Index has
registered a cumulative return of 325.1% compared to
221.9% for the S&P/TSX Composite Index (9.4%
compared to 7.6% in annualized terms).
- While we measure the NBC Canadian Family Index over a long-term
horizon, as we highlight family-controlled companies' ability to
generate alpha over generations, it is also interesting to note
that, both over the course of the 2008 Financial Crisis and the
2020-2021 COVID-19 market disruptions, the NBC Canadian Family
Index has also outperformed the S&P TSX Composite.
Quotes:
- Laurent Ferreira,
President & CEO, National Bank of Canada: "Many of the great Canadian business
successes take root in the idea of an entrepreneur who, surrounded
by talented and trustworthy people, knew how to make it grow with
patience and discipline. Understanding the role of
family-controlled businesses, as well as their specific
characteristics, is essential to the development of our economy and
its diversity."
- Vincent Joli-Coeur, Vice-Chairman, Financial
Markets at National Bank of Canada: "This Spring 2022 issue is about
long-term vision embraced by their leaders, and the role played by
Canadian families and founders to build global flagship companies
such as Alimentation Couche-Tard, Canada Goose and Lallemand. Each
of these companies is a true global champion, with solid family
roots in Canada. Each is a global
leader in its field and has dedicated long-term focus to its
international expansion."
- Dr. Karl Moore Ph.D., Associate Professor, Desautels Faculty of Management, McGill University and Associate, Green Templeton
College, Oxford University: "One of the
most charming things was to hear of Dani
Reiss, Karinne Bouchard,
Antoine and Frédéric Chagnon's humble starting positions in their
firms. Hearing their views reinforced in my mind the tremendous
value of family firms in a quickly changing global economy. I came
impressed that these family firms are well placed to prosper and
evolve successfully in these uncertain times. Family business
leaders are often spending 25 or 30 or more years in their firms
giving them a depth of perspective so often lacking for most
executives who move from one firm to another in the course of their
career."
- Karinne Bouchard,
Corporate Director, Alimentation Couche-Tard: "The biggest
advantage of being a family-controlled company is the business
culture instilled by its founders. I remember when I was Global
Treasurer, every penny was important. It is our money; it is our
hard work that we have done all our lives. The four founders are
still the largest shareholders and Couche-Tard is the result of
their culture of hard work. This is the foundation of our long-term
success."
- Antoine Chagnon,
President & CEO, Lallemand: "When you are expanding a family
business, I believe it is all about the long-lasting relationships
the owners develop. Our unique knowledge of the industry, our
relationships and persistence in negotiating with other parties
helped us consolidate and internationalize."
- Arjun Khullar, Managing
Director and Head of Integrated Strategies, GIC: "GIC is genuinely
long-term. In our annual reports, we refer to 20-year returns as an
important benchmark. When you think 20 years out, you assume that
every investment you are going to make could be for the long term
and that does change the way you look at things. In my view, one of
the main benefits of family-controlled businesses is that they are
willing to take this long-term view."
- Dani Reiss, CEO &
Chairman, Canada Goose: "Being a good company and being a good
corporate citizen is something that's very important to me and to
everyone at Canada Goose. Giving back to the community and ensuring
we're doing our part to protect the environment around the world.
At Canada Goose, our purpose is to keep the planet cold and the
people on it warm – and that's just what we'll do."
- Maureen Sabia, Former Chairman of the Board,
Canadian Tire Corporation: "Since becoming Chairman in 2007, I have
seen the Company's revenues grow from $8
billion to over $16 billion,
the result of some bold and innovative initiatives. This could have
not been possible without the long-term focus of the Billes family.
I am sure that the Billes brothers would be very proud that their
innovative and entrepreneurial vision for the Tire, and their focus
on helping communities, are still guiding us. I know that
Martha and Owen Billes are very
proud that the values of our founders are still to be found deeply
embedded in the culture of Canadian Tire."
About The Family Advantage –
Spring 2022 Report
The Family Advantage 2022 updates and enriches the 2020
edition of the report. It presents the NBC Canadian Family Index
calculated by S&P Dow Jones Indices, which tracks and measures
the performance of Canadian companies controlled by families
relative to the S&P/TSX Composite Index, the main index of the
stock market. The Family Index includes 44 family-owned Canadian
companies in different sectors across the country (see the full
list of companies included in the Appendix) and is based on the
application of objective quantitative criteria to an index universe
provided by S&P Dow Jones Indices, the Index
calculator.
In the NBC Canadian Family Index, a company is considered to
be family-controlled if the founding family or founder(s) directly
or indirectly hold at least 10% of the company's voting rights or,
alternatively, if individual(s) and/or related entities (not
founders) hold at least 33.3% of the company's voting rights (for
more information, please see our website
here).
Vincent Joli-Coeur,
Philippe Lefebvre Duquette and
Alexandre Tessier from National Bank
of Canada alongside academic
contributor Dr. Karl Moore of
McGill University and Oxford University are the co-authors and
coordinators of this report.
About National Bank of
Canada
With $370 billion in assets as at April 30, 2022, National Bank of
Canada, together with its
subsidiaries, forms one of Canada's leading integrated financial groups.
It has more than 28,000 employees in knowledge-intensive positions
and has been recognized numerous times as a top employer and for
its commitment to diversity. Its securities are listed on the
Toronto Stock Exchange (TSX: NA). Follow the Bank's activities
at nbc.ca or via social media such as
Facebook, LinkedIn and
Twitter.
SOURCE National Bank of Canada