FAMILY BUSINESS: Lionel Samson & Son

Australia’s oldest continuous family company was headed for a sale or break-up until shrewd governance structure reforms reconnected dispersed family members.

What do you do if you are the only family member working in an old family company and when you apply to be chief executive, the board, chaired by an outsider, knocks you back?

The answer, in the case of Steve Samson at least, is that you swallow your family pride, get on with your new boss and throw yourself into being one of his directors and one of the chairman’s major shareholders. Was he disappointed? Yes, but family businesses can be complicated like that, and spitting the dummy would only hurt yourself.

Lionel Samson & Son Pty Ltd is easily Australia’s oldest continuous family company. It started in 1829 when a wealthy young stockbroker named Lionel Samson emigrated to Perth after bumping into the newly appointed governor of the Western Australian colony, James Stirling, around London and was persuaded that WA was an easier and more interesting place to get rich than the London Stock Exchange.

He caught the third ship to the colony and set up as a general merchant in Fremantle, acquiring Perth’s first liquor license, which the company still holds, and becoming its first Postmaster General.

Five generations on, the company is still based in Fremantle but is mainly a transport operator through Sadleirs (bought in 1939) and also owns a winery called Plantagenet Wines, and a plastics business. Its revenue is about $200 million, it employs 550 people and Lionel’s descendants still own 100 per cent of the business.

Steve Samson is fifth generation and one of 80 members of two branches of the family – the Cooks and the Samsons – who now own the company through three family trusts, one for each branch and one that equally represents each of them. He is also deputy chairman of Family Business Australia, the organisation that represents family businesses.

His day job is as Lionel Samson & Son's manager of business excellence, compliance and property development, reporting to the managing director Neil David, who was recruited from Toll Holdings a year ago. He is also a director of the company and a member of the Family Council to which the directors answers.

He finds it "a bit tricky” sometimes to carry out these various roles: reporting to someone who also reports to him as a director and owner, while sitting on a board as one of the owners to whom the board reports. But he says it works because everyone gets on well, and his main goal as a Samson is to ensure the sustainability of the company under family ownership.

A few years ago, Lionel Samson’s legacy was facing a common problem for many long-standing family companies: it had been dominated by one or two strong descendants and the rest of the family had become disengaged. It was heading for sale or break-up due to lack of interest. Steve Samson’s focus has been on trying to reconnect the dispersed family members with the business to ensure that it survives into the sixth generation and beyond.

To that end he has been driving a series of reforms of the company’s governance, including managing a difficult transition from a group of loyal senior managers who had been with the business for between 30 and 40 years. "People who have been with a family company for that long come to feel like they are part of the family. It can be difficult. The dark side of that sort of loyalty is that people feel like they have a job for life – that it’s their business”.

The Samsons and Cooks have now established a six-person Family Council for the first time with three sub-committees, the members of which are drawn more widely from the family than just the members of the council. The sub-committees are named: History, Next Generation and Business, and any member of the two families can put his or her hand up to join them.

Steve Samson says the ownership of the company is now in the hands of a "Consortium of Cousins” – the children of eight fourth-generation descendants of Lionel, who beneficially owned one-eighth each of the company through the three trusts

There are five directors on the board, which is chaired by Michael Smith, one of Perth’s most prominent company directors – he is chairman of iiNet, and the Perth International Arts Festival, and a director of Automotive Holdings Group and 7-Eleven. It meets monthly and now holds elections for a third of its members each year at the AGM, at which about 30-35 family shareholders typically turn up.

Next step, he says, is to set up a buyback scheme to provide family members with some liquidity. Most family members have a job somewhere else and while some live on their dividends from the company, no one’s getting rich on them. In fact the dividend was cut during the most difficult years of the wine industry to support Plantagenet, which caused some friction.

It’s probably fair to say that all family businesses, especially when they are down to the fourth and fifthe generations, need a Steve – someone who is driven to preserve the family traditions, whether he or she runs the company or not.

It’s clearly in the family’s best interests for the company to be run by the best person for the job, not necessarily a family member. But the cost of that can be that it loses the sense of being a family company, both to outsiders and insiders.

The best way to achieve "family preservation” is through a governance structure that formalises family participation. And it sounds like the Samsons are well on their way to achieving that through the Family Council and its sub-committees – especially the ones dedicated to history and next generation succession.

Every week Alan will be writing about an Australian family business success story. If you know of a family business that deserves recognition, email

Follow @AlanKohler on Twitter

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