Emilio Botín Sanz de Sautuola y López died on the second day of autumn 1993 in El Promontorio, a beautiful English-style palace in the Cantabrian capital. A banker, son and grandson of bankers, during the 57 years he dedicated to Banco de Santander he lived with the dictatorship of General Primo de Rivera, the Republic, Francoism and democracy. Today his granddaughter, Ana Patricia Botín, presides over the family bank, which has a capitalization of almost 60,000 million and is one of the largest companies in the country. Many things have changed since his grandfather's time, but others are still there, such as the survival of a family culture adhering to the financial project that his father continued and that now rests on it.
Ortega, Del Pino, Entrecanales, Grifols, Escarrer, March, Carceller, Koplowich, Díaz Tejeiro, Loureda... many Ibex 35 companies are owned by investment funds, often international, but a significant percentage (up to 14% of the total capitalisation) is still in the hands of the main founding families or heirs to fortunes forged by their ancestors. Outside the stock market there are real empires (the Roigs in Mercadona, the Álvarez in El Corte Inglés, Andic in Mango, the Mahou family...).
Sometimes, the permanence over time of these strains can arouse misgivings: "This is one of the countries where money has changed hands the least in the last hundred years," businessman José Elías Navarro (Audax) told EL PAÍS a few months ago. But proving this statement (or the opposite) is a practically insurmountable task, because beyond the known fortunes, most business families have a strong propensity for anonymity, as pointed out by Paloma Fernández Pérez, professor of Economic History at the University of Barcelona and a leading researcher of the phenomenon of family businesses. "They don't usually write things down, they usually work them out in the dining room or while celebrating grandma's birthday," she smiles. Normally we talk about the great fortunes, the ones that appear on international lists, but they are only the tip of the iceberg. And there are a lot of icebergs in the pool of family businesses."
King Felipe VI greets the chairman of Mercadona, Juan Roig, in the presence of the chairman of Banco Santander, Patricia Botín, at the opening of the National Congress of Family Businesses held in Bilbao. LUIS TEJIDO ( EFE )
Since 2006, the Credit Suisse Research Institute has been analysing the business model of 1,000 family businesses around the world. Their reports bring to the surface debates about how that model can influence risk appetite, innovation, productivity, or issues related to succession, where arguments and fights often arise. In their study this year, when examining the evolution of the stock market, they found that these thousand listed family businesses generate an average annual capital gain of around 3% since 2006 in all geographies of the planet. "Performance is strongest in younger-generation companies (...) and subsequent ones may face obstacles to growth due to succession issues." Instead, they found that these companies spend less on research and development than their non-family counterparts.
The Family Business Index compiled by EY and the Swiss University of St. Gallen, also released this year, reveals that the world's 500 largest family businesses are growing faster than the global economy, nearly twice as fast as advanced economies and 1.5 times the rate of emerging markets. They collectively generate $8.02 trillion in revenue (€7.3 trillion) and employ 24.5 million people. Almost half are European and 30% are located in the United States, although the number of large Asian empires has continued to grow since 2015. The consumer sector continues to reign supreme in the family universe (37%), but those related to mobility and technology are increasing their weight year after year.
Returning to Spain, family businesses reign supreme in the country's productive fabric. They generate 67% of employment (6.58 million jobs) and 57% of GDP, according to the Institute of Family Business (IEF). As for the survival of the great dynasties over time, existing approximations show that, between the middle of the last century and the beginning of the twenty-first, the authentic Spanish family business elite had interests in the construction, engineering, commercial distribution and auxiliary services sectors and, to a lesser extent, in food, beverage or mining companies. It was the time of the Cros, Sarrió, Hidalgo, Osborne, Urquijo, Benjumea, Gut, Comas y Blanco, Ballvé, Lao, Lara, Pascual, Carbó, Aresti-Ortiz, Daurella, Fierro-Viña, Fluxá, Polanco, Ybarra, Antolín and Lladó. Some of these dynasties have lost power over certain businesses, but have instead diversified their wealth into others.
Jesús María Valdaliso, professor of History at the University of the Basque Country, recommends not forgetting that behind surnames there is a business activity that usually has "positive" effects on the economy: "All those who end up being great have done things well, they have taken risks in times of uncertainty". Should its permanence over time worry believers in meritocracy? "The lasting power of family dynasties is one thing, meritocracy is another," Valdaliso replies. "The figure of the founding or self-made entrepreneur is one of the best examples of meritocracy. They can and do coexist. Family dynasties need a meritocratic system, since they tend to mix and renew themselves with the incorporation of outsiders into the family."
Antonio Garrigues Walker, honorary chairman of the firm that bears his surname, has seen this in many clients. "The future of a family business depends on asking yourself the following question: when do you stop being family? At first, the family-business is underdeveloped, but when many faces begin to appear, the issue becomes more complicated. Appetites, vanities, tremendous ambitions are generated." But asking that question is far from easy. When the Institute of Family Business (IEF) asks its members what their first objective is, a very high percentage allude to survival. "I would almost say that they consider the business project as an anchor on which the family project revolves," reflects Esteban Sastre, director of Economics at the IEF. "Larger and larger families have to create environments that allow different points of view to coexist."
It points to a problem that is common to any dynasty anywhere in the world, according to the fifteen experts consulted. But if it is a question of distinguishing patterns in Spanish business families, Rafael Castro, a professor at the Autonomous University of Madrid, identifies a few: "If you look at the business elites in the last 150 years, they are all linked to three places: Madrid, Barcelona and the Basque Country. The first, because it concentrates political and financial power, and the second, because of its industrial weight. If we analyze the 100 largest entrepreneurs, we find that most of them are engineers, from good families, they have a high value on succession and they see beyond the short term." He also acknowledges that they are surrounded by opacity: "They believe that the less you know about them, the better." On the other hand, from the University of Santiago de Compostela, Professor Xoán Carmona believes that a differentiating myth must be demolished: "In the 90s, business management books distinguished Spanish companies from the rest. They talked about the cliché that Italian women were strong in industrial design, English women in finance and German women in technology. That may be true in the world of small businesses, but not in the big ones."
Andrés Villena, professor of Applied Economics at the Complutense University and author of The Networks of Power in Spain, points out that in the heat of these fortunes, "a technostructure" has developed, often of high-ranking officials, often of state lawyers or commercial technicians and economists, who, without being exactly rich, move to the private sector to manage the wealth of the great estates.
Like it or not, in the world, power with capital letters is concentrated in families (and that includes politics). In theory, the opening of companies to the market through the stock exchanges should have cornered the power of the large lineages, distributing the capital among a plurality of investors. But is that really the case? Despite the absence of specific studies on the subject, it seems that it is not, although with nuances.
The economic historian and professor at the Carlos III University, Miguel Artola, reflects on the importance of decision-making power, beyond dominating a more or less large piece of cake in a company. "40 years ago owning 2% of a company might not have been decisive, and now it can be. The logic of the stock market tells us that there are more institutional shareholders, such as Blackrock-type funds, which often do not have such an active role in management," and that they leave the burden of government to others. Raymond Torres, director of Economic Affairs, at Funcas, adds that it is the companies that want to gain size that inevitably end up opening up to other investors, and there is the risk of loss of control, but at the same time it gives them an opportunity to grow that they would not otherwise have.
Paloma Fernández analyses it from a European perspective. "In the 70s, Italians, French and Germans began to let investment funds into their companies. In Spain, that came later. When Spain joined the European Union, there was an important know-how behind it, due to the experiences of other countries. This is when the consulting business expands in Spain, with a theoretical objective of advising on the succession of family businesses, which actually has to do with managing the wealth of large fortunes in an increasingly open and global world. That's when banks start opening up their private banking divisions."
An evolution is taking place, business families diversify their investments as more and more financial tools are available to them. "Most family businesses disappear before the first handover. The disappearance of them is not a problem, but the disappearance of business families is," Valdaliso believes. Perhaps in the collective imagination, these business families exercise, as César Molinas described in his book What to Do with Spain, a traditional capitalism, based on the capture of rents and proximity to a power that is typically Madrid. Although for its author, as influential as that power is, it must be observed carefully. "I think politics in Spain is quite independent of family power. Large family businesses evidently know which door to knock on. But I don't think it's that different from other countries."
Business leaders often complain about the lack of social recognition that their figure entails, and perhaps this is an aspect closely linked to the role of business families in history. Alberto Gimeno, a lecturer in the Department of General Management and Strategy at Esade, distinguishes between those that are aimed at creating economic value, for themselves and for the society in which they live, and those that only aspire to preserve it, which he sums up in two words: stay rich. "The latter are losing entrepreneurial appetite and the ability to impact society. They are families that invest in the real estate sector, in funds, in debt, in assets of various kinds that are managed by others with a conservative mentality." Then there are, he says, those who have reached a state of transcendence who seek to perpetuate their legacy through philanthropic foundations.
"Business families and the wealthy are part of the elite of our society. I think it's relevant—and I'm speaking in terms that Ortega y Gasset would use—to know to what extent they are more or less virtuous." In his reading, in front of these virtuous elites, there would be the "corrupt elites", who build mediocre societies that stop believing in them. "We are in a society that loses trust. Capitalism has been able to create an unparalleled level of wealth, but it has been transformed and much of it lacks a soul," he laments. Silvio Berlusconi or Donald Trump could be good examples of this. "However, I have met businessmen who, during the crisis of the Catalan independence process, considered taking their capital out of the country (legally). But they decided not to, because the money had been earned here. It's an example of how important a certain moral reconstruction is."
The Rockefeller Case
Perhaps the present is not so different from the past. John D. Rockefeller, one of the richest people of all time, used financial engineering to create shell companies to control when he was forced to break up Standard Oil. So did other dynasties, from the Fords to the Mellons, to move money fast and in imaginative ways. "In Spain during the Franco regime, many children of wealthy families sent their young heirs to study at schools in the Jersey Islands to obtain visas with which to open bank accounts there," recalls Paloma Fernández.
Other dynasties, on the other hand, managed to survive global upheavals thanks to their commitment to the territory where they operated. "After a major war or a pandemic, it is proven that business families are much more productive than those that are not. Sakichi Toyota may have gone bankrupt after World War II, but during the toughest periods it offered its employees, with whom it had a semi-familial relationship, to grow pulses on the factory floor." After the war, they all returned to help him rebuild the company. Perhaps in Spain this climate of collaboration has not been so present, hence the collective memory of exploitation or the lack of structural links of reciprocal support in hard times. And perhaps the good climate of social dialogue that employers and trade unions have deployed in recent years is the turning point in this sometimes stormy relationship between workers and employers.
Trade union control
An article dated April 1, 1979 in this newspaper published several lists of what Spaniards paid to the Treasury. It was headed by José María Ruiz Mateos (Rumasa), and was followed by the Gipuzkoan industrialist José María Aristrain, Ramón Areces (El Corte Inglés), the banker Ignacio Coca (absorbed by Banesto) and the Segovian Nicomedes García Gómez (Whisky DYC). Six pages that today would be irreproducible due to the data protection law gave names and surnames to the social elite that was landing in a newly inaugurated democracy. 44 years later, reflections on power continue to spark widespread debate. "One of the civilizational advances of democracy is that power is not permanent, but we find that economic power is more permanent, and that generates the problem of the capture of regulators, politicians, revolving doors," says Carlos Martín, a deputy from Sumar. "I think that the next civilizational leap, as Thomas Piketty or Gabriel Zucman argue, is to propose that this power be more temporary. We have already achieved this in musical composition, where the times of use of patents have been shortened. Why not do it with the ownership of the means of production?" In his story, Martín introduces the proposal of the government pact to incorporate workers' representatives in the boards of directors, starting with the large companies, something that has been working for years in countries such as Germany and that the employers have rejected for Spain. "If progress leads us to an increasingly robotized world where we manage to free ourselves from work, in this new world we will have to articulate new ways of participating in the profits generated from the means of production," he says. But even so, Andrés Villena points out, it may only be possible to incorporate the union elite into the councils, and not facilitate real control of the worker base.
Follow all the information from Economía y Negocios on Facebook and X, or in our weekly newsletter
Subscribe to continue reading
Read without limits
I'm already a subscriber