Case 9: Fasteners for Retail: A Question of Succession (Part A)
Suggestions for Use
Fasteners for Retail (Part A) can generate detailed discussions of leadership of the
various stakeholder groups in a family business as well as a variety of managerial and
governance practices often employed to promote successful succession and continuity.
Paradoxically, given the effective use of many of the best practices for family
Executive Brief
Gerry Conway, the entrepreneur, had founded FFr in 1962. In December of 1999, he
faced the toughest decision of his 37 years as a business owner. Should he continue to
strive to identify a CEO successor in the family? At the age of 69, did it make sense to
life
and career?
the next President and CEO but instead wanted to leave and become a teacher.
urgency and a customer-first orientation.
In the early 1990s, Gerry and his wife Marty joined Case Western Rese
Partnership for Family Business. Through the program, Gerry began to see the need for
Several of the Conway children were involved in the company over the years. Only
Paul seemed genuinely interested in being the successor as of 1998. Family meetings in
their family council promoted much education and communication, and the agenda of the
meetings shifted over time to the business of the family from family business.
Estate planning and ownership transfer were addressed in these meetings and estate
planning attorneys were brought in to educate family members on the topic. A GRAT, or
grantor-retained annuity trust, was chosen and significant estate tax savings ultimately
realized.
A board of advisors meeting and a family meeting were both scheduled. Gerry was
committed to working through this dilemma with the assistance of others.
Discussion Questions
1. What was Gerald Conway doing to lead these three key constituencies: (a) non–
family employees, (b) family members working in the business, and (c) other
family shareholders?
Nonfamily employees Providing them with attractive compensation and benefits,
involving them in setting the direction for the business, providing equity participation
Family members working in the business Providing them with career and business
opportunities, challenging them to grow and improve the company, creating a vision
for family business continuity that foresaw them as the future leaders, developing
2. What managerial and governance best practices was Gerry Conway relying on
to promote family business continuity? Please discuss each practice and how it
was used.
All three leadership imperatives were present in this situation. Gerry Conway initiated
the process of developing the next generation, created the board and family council to
govern the family business relationship, and began the transfer of power in both
Estate planning and ownership transfer with business agility in mind The GRATs
and other estate-planning vehicles used allowed for estate tax savings that protected
capital for growth and reinvestment while allowing for voting and nonvoting stock.
The plan was to transfer the voting stock only to family members active in the
management of the business.
Whether in marketing, engineering, product development, finance, even the
presidency, the Conways made very capable nonfamily management an influential
part of company leadership. They greatly influenced the ultimate strategy to grow the
company further and professionalized the running of the business.
3. What do you predict will happen in this case? Explain your reasoning.
The family will decide to sell all but a minority of the shares to a financial buyer. This
will provide the company the capital to grow, keep the company as an employer in
Fasteners for Retail: A Question of Succession (Part B)
Suggestions for Use
This case follows Fasteners for Retail: A Question of Succession (Part A) and tells
the student what happened after a series of board and family meetings where succession,
family strategy, and company strategy were discussed. The aim of the case is primarily to
help students explore the desirability of selling the family business in order to ensure its
competitiveness and continuity. Does this represent a successful outcome or not? The
Executive Brief
The board and family council (minus the next-generation spouses) meet. The decision
is made to pursue the transaction with a financial buyer. While this
company will stay in Cleveland for at least a few more years, and perhaps forever as it
Discussion Questions
1. What other options were there? Was there anything Gerry Conway should have
done to change the outcome of this case?
Coaches and board members could have further aided Paul. He could have ultimately
come to the conclusion that he could run the larger company using a different
2. Was the decision to sell to a financial partner a successful outcome for the
business and the Conway family? Why? Why not?
ideological or emotional preference. For some, the outcome of the FFr case represents