For many family-owned businesses in Germany, finding themselves in the public spotlight is a nightmare scenario. Reputational risks increase, especially in times of crisis. When changes are afoot within the company, the owners quickly become the focus of attention for the media, employees, politicians and customers. In terms of communications, those who otherwise prefer to remain in the background need to be well prepared for all eventualities – also to ensure their own families remain protected.

Family businesses are often cautious in their external communications, the owner families themselves even more so. Although schools, streets and squares are named after them, they usually operate in the background. Whether they are ‘big names’ or well known on a more local level, they frequently prefer to be discreet, even in times of social media and information overload.

Always think about communications

Many entrepreneurial families have defined the rights and obligations of their members in their own governance codes. Some codes of conduct also contain provisions on how to behave in terms of communications. In many cases, these stipulate that family members should not appear in public. Each family must determine its own fundamental approach. There are good reasons to be cautious in their communications. However, the environment is often so complex that communications must be considered and managed in the same way as legal, tax, strategic or personnel issues.

The starting conditions vary: Are management and capital separate? Or do family members hold prominent positions in the company and cannot easily avoid certain communications requirements? Are the family and company names identical, making it easier for negative events in the company to reflect on the family, even if it is not involved in the day-to-day running of the business? How widely branched is the family? Some are closer to the business, while others just expect an annual dividend.

Goal: Retain authority over how situations are interpreted

It is important to note that communication is not an end in itself. It is not about positioning oneself in the public eye per se – and certainly not about acting as a loudspeaker or making a grand entrance. The key is to be aware of communications risks and prepare for contingencies:

• What critical issues could arise and potentially cause setbacks for the owner family?
• How could an issue develop; where are they vulnerable to attack?
• Who has an interest in spreading negative reports or assigning blame; are there tensions within the family?

The aim is to retain control over how critical issues are interpreted and to make sure that the ability to respond and communicate appropriately is secured – in other words, to be prepared, both in terms of content and organisation:

• Content: What core messages, answers to potentially critical questions or approaches for a ‘bigger narrative’ are being set?
• Tactically: Will there be no comment, only responses to enquiries, or will a critical issue be actively addressed? Should statements be quoted openly or should only contextual background information be provided?
• Operationally: Who speaks? A designated family member, the company on behalf of the family, or an external spokesperson, such as a consultant?

These are just a few of the questions that need to be systematically addressed. It should be noted that this is not just about behaving correctly towards the media. Often, it is about seemingly more mundane situations. Being able to communicate effectively also means being properly prepared in everyday life when critical or even just curious questions arise at the local bakery, tennis club or Rotary Club. Forward-thinking entrepreneurial families equip their members with recommendations for how to behave as well as language guidelines for exactly these situations.

Operational risks are reputational risks

Risks arise directly from the company’s operational business and planning – for example, product recalls, environmental pollution, cyber attacks, violations in the supply chain, plant closures or relocations abroad. Corporate crises have a knock-on effect on the owner family, especially when the family name is also on the factory gate.

Entrepreneurial families should therefore use their ownership function – for example, through advisory board or supervisory board roles – to ensure that their companies have functioning crisis communications processes in place. As part of an overarching risk management strategy, this includes the early detection of communications risks, preparation for critical issues, and the establishment of structures and processes that enable rapid and consistent action, globally if necessary. The family should be aware of the potential risks and, in conjunction with operational management, agree on information and coordination mechanisms in case of an emergency in order to minimise reputational risks.

Transformation raises questions

Numerous family businesses are facing major transformational tasks that also affect the immediate interests of shareholders. Three issues with communications risks for entrepreneurial families are currently at the top of the agenda:

• Measures to ensure competitiveness, such as restructuring or strategic realignment
• The involvement of external investors such as private equity firms
• Succession planning in management

Pressure to adapt leads to pressure to communicate

The economic situation in Germany, the transformation of entire industries and upheavals on the global markets are also forcing many family businesses to take drastic measures or realign themselves. This results in job cuts, plant closures and the relocation of production abroad. There are also more and more sales of parts of company portfolios taking place.

Such often unpopular measures quickly call into question the role of the owners. The responsibility for jobs, Germany as a business location, or the common good – which entrepreneurial families generally hold to be particularly important – is called into question. And last but not least, the economic difficulties of companies are often personified. Entrepreneurial families repeatedly serve as a projection screen for speculation, commentary, and criticism by the media, trade unionists, employees, or the local public. Accordingly, there are also rising expectations for explanations and context.

When private equity comes knocking

In view of more difficult financing conditions, necessary investments in digitalisation and artificial intelligence, and to support international growth, more and more family businesses are considering bringing in external investors. Nine out of ten family businesses are theoretically interested in private equity investment, according to a study conducted by the auditing and consulting firm PwC at the end of 2023 – a figure that has risen significantly since 2011. According to PwC, they hope that an investor will provide them with more solid capital resources, higher returns and profits, or better market access. Bringing in external investors raises a number of questions: How can the company’s own communications behaviour be reconciled with that of the investor? How will the culture and self-image of the company change? What does this mean in terms of processes and structures? Are there new transparency requirements?

Different worlds

The very process of approaching investors – often involving many participants and the involvement of investment banks, M&A advisors and lawyers – is sensitive in terms of communications. Information from the process can be leaked. And once the deal is done, many investors have disclosure obligations, even though the owner families involved in the sale would prefer the fact that external partners are entering the business to be handled behind closed doors. Accordingly, communications requirements and contingencies should begin to be considered long before the purchase agreements are signed. A ‘controlled opening’, for example by addressing the strategic options and prospects of the owner family at an early stage, can help to maintain control over the process and set the content framework. There are no blanket recommendations for this. The approach must be determined on an individual basis. Either way, the wording of the press release announcing the entry of an external investor is merely the technical outcome of a consistent communications strategy that is designed to maintain authority over how the process is interpreted, the role of the family and the future of the company. A credible story about the future aims to dispel reservations, gain approval for the course of action and create motivation for cooperation. It is also important to define the future self-image and culture of the family business.

Ensuring a smooth succession

Particular communications challenges include succession planning at the top of the company and the transition process. The handover from the older to the younger generation or to an external manager is challenging for both sides. All too often, the previous person at the top remains the figurehead or continues to intervene in day-to-day business. Successors, however, sometimes embody a different management style, break with cherished traditions and seek entrepreneurial freedom. Mutual expectations are not clearly articulated and the transition is not properly managed. The result: a rift can occur, damaging all parties involved.

A systematically planned communications agenda can make personnel changes comprehensible and credible. Based on a well-founded comparison of expectations, it can create trust and support for the new management among family members, executives and external stakeholders. And especially when managers from outside the family join the company, it can also accompany cultural change.

Consultants as communications ‘bodyguards’

Finally, the question arises as to how owner families can prepare themselves operationally for the communications challenges they will face. In many cases, they can draw on the resources of their own company. In some cases, it also makes sense for them to work directly with those responsible for corporate communications. However, there are equally good reasons for them to discuss their interests with external communications consultants – just as they would engage their own lawyers to protect their shareholder interests. Through continuous and trusting dialogue, the consultant can thus become a navigator and ‘bodyguard’ when it comes to communications.

First published in DIE NEWS – Fachzeitschrift für Familienunternehmen in February 2026.

Olaf Arndt
Senior Partner
[email protected]