Brazil-based group Odebrecht wins IMD – Lombard Odier
Global Family Business Award
October 4, 2010
Geneva – Odebrecht, a Brazil-based family group specializing in construction, engineering and petrochemicals, was awarded the 15th annual IMD – Lombard Odier Global Family Business Award at the 21st Family Business Network International Summit held in Chicago on October 1.
Awarded by Lombard Odier Darier Hentsch & Cie, one of the main firms of private bankers in Europe, and IMD, one of the world’s leading international business schools, this award is regarded by many as the most prestigious honor for successful family companies. It recognizes the way in which such companies unite family interests with those of the business and combine tradition and innovation while demonstrating a clear commitment to their local community. The award also serves as a platform for family businesses to exchange best practices and analyze the economic backdrop.
For 15 years this award has distinguished prestigious family businesses from the most varied sectors, including LEGO, Hermès, Barilla and Yazaki Corporation.
This year, the jury chose the Odebrecht Group due to its shared philosophical approach that guides all of the group's activities and the cultural and ethical values on which such activities are based. Odebrecht holds a stake in a large number of small firms, whose managers, known as trusted partners, impart the key principles that govern the company. Odebrecht acts as a federation of entrepreneurs who are united by their long-term outlook and their focus on client satisfaction, returns, personal self-development and -– above all – the reinvestment of income in order to create new work prospects and foster the development of their local communities. The award also pays homage to the group's ambitious and visionary diversification and internationalization strategy, which led to strong financial performance and exceptional growth in spite of the crisis: over the past decade the Group went from $4.2 billion in 2000 to $23.3. billion in 2009 and a rose in headcount from 21,000 to 87,000.
“Fifteen years of studies have shown us that family businesses are more solid and more successful over time than their competitors thanks not only to their long-term vision, human values and unparalleled spirit of innovation, but also to their capacity to take risks – a liberty that publicly listed companies are unable to afford and that gives family businesses a real competitive advantage. The Odebrecht Group is a perfect example of this,” states Professor Dominique Turpin, President of IMD.
Family businesses are the oldest and most widespread business model throughout the world. A major source of revenue, jobs and tax contributions, they are key players in the economic system and often serve as models for long-term growth, profitability, stability and survival through periods of crisis.
Mr. Thierry Lombard, Managing Partner of Lombard Odier Darier Hentsch & Cie and Chairman of Family Business Network International, expains: “For 15 years we have bestowed this award to highlight the invaluable role and substantial – yet often underappreciated – contribution of family businesses to the global economy since they can constitute between 60% and 90% of a country's economy. As a representative of the sixth generation of our firm of private bankers, I am convinced that family businesses are and will continue to be one of the most powerful engines of our economy, driving growth and progress for generations to come.”
The economic weight of this company format will garner even more importance on the world economic scene due tp the influence family business such as Odebrecht play on emerging markets (BRICs). In Europe and the United States 60% of companies are managed by family structures – this figure is as high as 90% in South America, the Middle East and Asia. The utmost importance is thus attached to the exchange of best practices and focus on excellence grounded in the aspects common to all family businesses. The IMD – Lombard Odier Global Family Business Award pays homage to such businesses.
The award itself, which is fashioned out of crystal, bears the shape of a tree – a symbol of family businesses. It is generously provided by the Scheufele de Chopard family and was crafted in that firm's Geneva workshops – a further example of a successful family business in the global arena.
About Odebrecht S.A.
Odebrecht S.A. is one of the largest non-financial Brazilian conglomerates, a leader in today’s emerging markets. It is the holding company for Construtora Norberto Odebrecht S.A., the biggest engineering and contracting company in Latin America, Braskem S.A., the largest petrochemicals producer in Latin America, and ETH, a leading ethanol producer in Brazil.
The Odebrecht Organization is majority family-owned and fully family-controlled, with family representatives having successfully steered the company’s fast growth through phases of internationalization and diversification. Over the last decade, the Organization managed an impressive increase of its gross revenues from $4.2 billion in 2000 to $23.3 billion in 2009, with a corresponding increase in employees from 21,000 to 87,000.
The Odebrecht family emigrated from Germany to Brazil in 1856, starting a strong legacy of innovation and pioneering in engineering. The first construction-related businesses were established in 1919, but it was truly the establishment of CNO S.A. in 1944 by Norberto Odebrecht (90) that laid the foundation stone of today’s Odebrecht Organization. He successfully translated strong family values into a powerful management system and corporate culture, described as the “Odebrecht Entrepreneurial Technology”. In 1991, Norberto’s oldest son Emilio Odebrecht assumed the CEO role. Throughout the company’s history, family members were always at the helm of the company, exercising direct executive control most of the time, except for a transition period between 2002 and 2009, when a non-family director held the chief executive position while Marcelo Bahia Odebrecht, Norberto’s grandson, was being groomed for the CEO role. The holding company Odebrecht S.A. has a majority interest in all its subsidiaries and fully controls them. It is closely held by the family holding, Kieppe Participações, which is chaired by Norberto’s oldest son Emilio Odebrecht, who currently also holds the position of Chairman of the Board for Odebrecht S.A.
The core ingredients in Odebrecht’s impressive success are a deeply rooted entrepreneurial instinct, combined with strong family values and the necessary firm trust in others to facilitate the delegation of responsibility throughout the chain of command and the promotion of extremely close links to key clients. These elements will continue to form the basis of the Group’s future growth and its ambition to become “one of the 50 most admired organizations in the world”.
About the Award
The IMD - Lombard Odier Global Family Business Award was created in 1996. The aim of the Award, which provides a unique platform for sharing best practices and analyzing the economic backdrop, is to promote family businesses by highlighting the exceptionally high standards they are capable of and the many forms they may take.
1996 Lego Group, Denmark
1997 Hermès S.A., France
1998 Corporación Puig, Spain
1999 Henkel Group, Germany
2000 Zegna Group, Italy
2001 Murugappa Group, India
2002 Samuel C. Johnson Family Enterprises, United States
2003 Bonnier Group, Sweden
2004 Barilla Group, Italy
2005 Votorantim Group, Brazil
2006 Lluís Carulla Foundation, Spain
Ivey Foundation, Canada
Lopez Foundation, Philippines
2007 Yazaki Corporation, Japan
2008 Roca Corporación Empresarial, Spain
2009 Merck Group, Germany
About the Award Jury
Thomas G. Bata, Bata Brands, Luxembourg
Hans-Jacob Bonnier, Bonnier Group, Sweden
Andrew D. Keyt, Loyola University Family Business Center, United States
Subbiah Murugappa, Murugappa Group, India
Mariano Puig, Corporación Puig, Spain
Alexander Scott, Sand Aire Ltd., United Kingdom
Prof. Dominique Turpin, IMD President
Prof. Benoît Leleux, IMD
Thierry Lombard, Managing Partner, Lombard Odier Darier Hentsch & Cie
Sylvain Massot, Head of Equity Research, Lombard Odier Darier Hentsch & Cie
About Family Businesses
Family businesses are the oldest and most widespread business model throughout the world. A major source of revenue, jobs and tax contributions, they form the backbone of our economic system. With their long-term perspective and shareholder orientation, family-owned businesses represent capitalism with a human face – combining social responsibility with a commitment to economic success. Particularly in hard times they benefit from their competitive advantages. Recent studies show that excellent family-owned companies around the globe outperform public companies in terms of long-term growth, profitability, and stability.
The IMD Family Business Center’s flagship program Leading the Family Business (LFB) is the world's longest-running program dedicated to family businesses.