One of the central – and hotly debated – topics in the study of family-owned businesses is finding the balance between the interests of family and business. We all know how complex families can be, and if you add the business dimension to it,you might instinctively reach out for a pen to start structuring your thoughts… Once you do, you will inevitably run into nepotism, as it transcends conversations about decision-making, governance, and most visibly, succession. Some insist it is an integral part of what allows businesses to survive and thrive across generations. Others see it as the Achilles’ heel of family firms and call it their biggest problem. Yet nepotism has a problem of its own: its definition, and the very blurry contours of the term.

What exactly do we mean when we say the N word? Definitions abound, and yet the picture remains unclear. And here’s the shortest I can give you: nepotism is a euphemism. (The runner-up would be simply “well, you know” — usually delivered with a bat of an eye.)

A word born in disguise…

Almost every account of nepotism begins with the same story, and for good reason: its origin is as telling as it is ironic (and iconic — fittingly Roman). The word takes us back to the 15th–17th centuries, when Popes were known to grant privileges to their illegitimate sons, who were conveniently presented to the world as “nephews.”

From the first day it started walking the earth, nepotism was not summoned into existence to bring precision, but to serve as an allusion — designed more to obscure, disguise, and hide than to clarify. The label carried moral judgment in its DNA already, although the ultimate purpose – taking care of your kin, and especially children – is even more hardwired in our DNA, and if we are reading this, that is the best evidence of it.

…becoming an army of secret agents…

Once you start digging into the topic, you discover that other languages offer plenty of juicy terms for nepotism such as guanxi, jeitinho, wasta, kumovstvo… In English it comes with a rich entourage of related terms too: favoritism, familism, dynastic succession, cronyism, asymmetric altruism. Nepotism is called strategic, wasteful, reciprocal, etc. – each adds a shade of meaning, each reflecting how elusive the concept really is. The very need for so many synonyms shows how hard it is to pin down where loyalty and justifiable action end and unfair advantage begins.

It is telling that Adam Bellow, in his 2003 book In Praise of Nepotism, called it both a “predisposition” and an “art” that has to be practiced carefully. Words like these capture the tension between condemnation and admiration – between seeing nepotism as a threat to meritocracy, and seeing it as a practice that, if handled carefully, sustains family identity and continuity.

…on a very particular mission.

This duality is what keeps nepotism so captivating — and why its intensity shifts over time. Is it poison, corroding professionalism, discouraging outside talent, and damaging reputation? Or is it glue – fostering loyalty, preserving and even transmitting family values, and anchoring long-term stability? Perhaps it is both, and perhaps whether it is one or the other is even the wrong question to ask.

For what seems clear is that nepotism and family businesses are inseparable companions. To say they walk hand in hand is almost an understatement. One could even ask: which came first – family firms or nepotism? Or more provocatively: is it even possible to imagine a family business without it? Thus, it becomes much more insightful to understand under what conditions, circumstances, and in what instances nepotism becomes beneficial — and how one can harness its benefits while limiting its downsides.

These are not questions with simple answers. But they are questions worth asking.

And just like the first of September signals a new beginning, this feels like the right moment to embark on exploring them. This also means something for my blog: it would be unfair for me to do all this fascinating reading and not share the insights from the articles. Thus, from now on I will ensure there is more transfer from the science of family-owned businesses onto the anvil of Verarius.