Skip to main content

Penny Green is Glance Technologies’s largest shareholder, with a slightly higher stake than her brother-in-law Desmond Griffin.

Rafal Gerszak/The Globe and Mail

When Desmond Griffin and his sister-in-law Penny Green decided to join forces on mobile payments company Glance Technologies Inc.​, it was to help expand the business with an eye to taking it public. About three years later, the family members are in a heated dispute​ – playing out in press releases and online – over the direction of the Vancouver-based ​financial technology ​company​, a small cap that went public on the Canadian Securities Exchange in September, 2016.

Glance’s technology is used in restaurants ​and by other merchants and the company says it’s currently developing a rewards-based cryptocurrency to be integrated into its platform.

Ms. Green, the company’s largest shareholder with a slightly higher stake than Mr. Griffin, was fired as president and chief operating officer in February. “We can no longer work with Penny, and Glance Technologies was not functioning properly with Penny in a management role,” Mr. Griffin said in a statement from him and his wife, Angela​ Griffin​, Ms. Green’s sister​, who is the company’s chief technology officer.​

Story continues below advertisement

Ms. Green is still a director and has called a shareholder meeting in June to remove three of the company’s five directors and replace them with her own picks. She also launched a website to lay out her case, including claims that the current board “lack[s] the relevant international experience, they have consistently ignored shareholders’ concerns, and have been unable and unwilling to capitalize on revenue-generating opportunities.”

Glance has since cautioned shareholders “to carefully review Penny Green’s track record and her claims about creating shareholder value,” according to a release, which also refers to past media articles critical of her previous business dealings.

It’s​ ​​a ​small company that’s not a household name, but it offers lessons for other entrepreneurs. While there’s an old adage that says never go into business with family (or friends), experts say the corporate pairing of relatives can be powerful, if properly handled. A recent​ Credit Suisse report of 1,000 family-owned firms worldwide​​, including some in Canada,​ showed the financial performance of family-owned companies is superior to that of non-family-owned businesses. The report, released last fall, says family-owned companies generated a cumulative return of 126 per cent since the start of 2006. Revenue and earning growth (measured by earnings before interest, taxes, depreciation and amortization, or EBITDA) was stronger, EBITDA margins were higher and cash flow returns are better, the report said, adding that family-owned businesses​ have a “longer-term and conservative focus.”​

A well-known example many experts point to is consumer products conglomerate SC Johnson, now being run by the fifth-generation of the Johnson family. It even uses the slogan “A Family Company,” to help boost its brand.

“When an entrepreneurial family gets together to work on something, they care so much more than someone who doesn’t have their name on the building or doesn’t have a stake in the community. To me, that’s a recipe for building a great business,” says David Simpson, head of the Business Families Centre at Western University’s Ivey School of Business. “However, when it goes poorly, it goes poorly doubled down because you’re losing your brother or sister or cousin.”

“There’s an intrinsic conflict that comes with family businesses,” says Mark Barnicutt, co-founder and CEO of HighView Financial Group, which works with high-net-worth families, many of whom are entrepreneurs with their own companies.

“Emotional issues easily come to the surface,” he says. The most successful family businesses recognize that could happen and put in place the proper governance, including family roles and responsibilities, to cover what happens when conflicts arise. “A business isn’t a family and a family isn’t a business. You really need to separate the two,” Mr. Barnicutt says.

Story continues below advertisement

Family members in business together should also outline what happens if one person wants out, or there’s a disagreement in direction, Mr. Simpson says.

“It’s unromantic … but a business is an organism that lives, dies and changes,” he says. “Businesses aren’t worth blowing up a family for. A business is just an instrument of economic gain … If you go the nuclear option of suing each other, you’ve hurt both the family and the business.”

Mr. Simpson once ran a business with his younger brother, Craig Simpson, a former National Hockey League player who is now a broadcaster with Hockey Night in Canada. The business relationship ended after his brother retired from hockey and focused more on the company. “We found out that our formerly passive, equal partnership didn’t work as active partners,” Mr. Simpson says. “We didn’t share the same vision, risk tolerance and personal objectives and our general assumption that siblings are of course similar, was surprisingly inaccurate. We were better brothers than business partners.”

Most often, it’s money and corporate strategy – including how various family members are compensated and disagreement over the direction of the company – that lead to family business feuds, says Jane-Michèle Clark, an instructor who teaches the family enterprise course in the entrepreneurship program at York University’s Schulich School of Business.

Ms. Clark recommends business families hold strategy sessions that cover topics such as their family values, how they want the business to work for them and vision for the company.

“When you start by reaffirming the family values and relationship, then get clear about each person’s expectations about what they want the family business to do for them, and then move on to the vision, the conversation takes on a whole different tone,” she says. And while she recommends family businesses bring in a family council or an advisory board “to act as both a resource and a buffer,” few do, believing it’s not necessary or conflict won’t happen in their case.

Story continues below advertisement

If he were to start Glance over again, Mr. Griffin says he would work to “understand the motivations behind each family member, and clearly lay out the parameters for effective communication.”

His advice for others is to treat family members the same as you would any other potential business partner. “Social and family interactions are not always indicative of how people will operate in business,” Mr. Griffin said in an e-mail to The Globe. “Don’t treat or rely on family members any differently than you would any other potential business partner … We have tried to make decisions that are based on what’s best for the company, not due to family dynamics.”

In an interview, Ms. Green said she would go into business with family again, but acknowledges that a public company may not be the ideal setting.

“If you can work with the people that you love, I think that’s fantastic,” she says, but adds that in hindsight, having agreements on how to handle business disputes would have been a good idea.

Still, Ms. Green feels the current feud won’t damage her family relationships in the long run. “This is just a blip in our long-term relationship.”

The 2018 Globe and Mail Small Business Summit is where Canada’s top entrepreneurs share their strategies for success. Full lineup at tgam.ca/SBS18.

Report an error Editorial code of conduct
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter