A third of family businesses in Malta do not have a functioning board of directors, and most of those that do say that only family members sit on the board, a new Malta Chamber study reveals.

This could represent a red flag for the future of these businesses, the survey suggests, also finding that those family businesses with outside input in their board could be more future-proof and tend to have more robust governance and decision-making systems in place.

The survey finds family businesses are more likely to have a succession plan in place, are more inclusive and evidence-based in their decision-making processes, and are more likely to have a strategic plan.

The survey was carried out amongst 160 family businesses of different sizes across Malta in February. A previous edition of the survey was carried out in late 2022.

One in three have a strategic plan or succession plan

The study finds that only a third of all family businesses surveyed have a written strategic plan in place, although the majority (53%) say they would like to draft one but have not done so yet.

Likewise, just 36% have a succession plan in place.

This is almost certainly down to a lack of time, the survey finds.

The absolute majority (86%) of business owners and directors say that they spend their working hours focusing on the day-to-day operations of the business rather than focusing on the bigger-picture strategic issues.

Business owners also say they struggle to find time to adequately train their employees, despite saying that retaining their workers is one of their most pressing priorities.

On the whole, business owners say that improving their financial performance is the key priority they face. They are also seeing a growing need to invest in new technologies that can automate their workflows or increase their efficiency, compared to the 2022 survey’s findings.

Other issues, such as making their business more environmentally friendly or rethinking their existing business model lags behind in their list of priorities, in a distant ninth and tenth place respectively.