The Secrets of Corporate Longevity

It turns out that how you run your company and manage your family are both essential to pulling o a generational transition and thus, achieve longevity. Barry R. Sloane, 59, president and CEO of Century Bank in Medford, Mass., is contending with how a family-dominated but publicly traded fi rm builds its core values into its culture and ultimately decides whether to pass the business to a third generation. His father, Marshall M. Sloane, founded the bank 45 years ago and is now 88. He still comes to work every weekday as chairman. Barry worked outside the family business for 19 years but returned six years ago to become CEO. His sister, Linda Sloane Kay, is executive vice president.

Between them, Barry and Linda have fi ve children, but none are involved in working for the bank yet. It was Marshall Sloane who decided in 1987 to mimic the way the Ford family structured its holdings in Ford Motor and took the bank public on NASDAQ with two classes of shares, A and B. The public owns A shares but have no vote. The family owns 90 percent of the B shares, and therefore dominates any vote. “It was an enormously important, strategic decision because it allowed us to focus on the long term and not be obsessed with quarter to quarter performance, even though we are,” says Barry. “But strategically, we can look at the long term.” The bank, with $3.5 billion in assets, is growing strongly and has enjoyed record profi ts for four years in a row.

When a customer calls the bank, she hears a recorded message that thanks her for calling “our family’s bank and yours.” In an era when big banks have taken over so much of the industry and have lost any personal connection with their customers, Century Bank seeks to differentiate itself by emphasizing its family values and personal touch. “This is our bank,” says Sloane. “That’s a good thing. It’s yours, too, now. We want you to feel that way. We would never sell a product to a customer that our family wouldn’t buy.” No tricky instruments, such as reverse mortgages, subprime loans or variable annuities. “We don’t believe in those things,” adds Sloane, who approves every loan the bank makes.

The family values come through, also because Sloane wants to pay his people well, support the communities where his bank has branches and contribute to local political candidates—not to mention satisfying shareholders. “It’s all about doing the right thing,” he says, echoing the view of other longevity-minded CEOs.