Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Beretta Family Kept a Gun Empire for 500 Years
Transcript
- Lucas: Luna, how many companies do you think have been run by the same family for more than five hundred years? Luna: I'm guessing not many. Maybe a handful in Japan, a few monasteries in Europe... I can't name a single one off the top of my head. Lucas: Well, there's exactly one company that's been under continuous family control since 1526. And it makes guns. I'm talking about Beretta — the Italian firearms manufacturer, now in its fifteenth generation. Luna: Fifteen generations. That's insane. I know Beretta by name, but I had no idea the family was still running it. Lucas: Most people don't. And that's partly because the family has been incredibly disciplined about staying out of the spotlight. But their story is a masterclass in governance structures that let a family business survive literally everything — wars, economic collapses, market shifts, even a near-bankruptcy in the 1990s. Luna: Let's start at the beginning. 1526 — that's before the United States existed. What were they making? Lucas: Arquebus barrels. The arquebus was an early matchlock firearm, and Bartolomeo Beretta, a master barrel forger in the town of Gardone Val Trompia, sold 185 barrels to the Arsenal of Venice for 296 ducats. That transaction is recorded in a document that still exists in the family archives. Luna: And they've been making barrels ever since, in the same town? Lucas: Same town. Gardone Val Trompia, in the Brescia region of northern Italy. The factory is still there. The family has lived in the same area for half a millennium. But the real question is: how do you keep a business in the family for fifteen generations without it collapsing under infighting or bad management? Luna: I assume it's not just luck. Lucas: Not at all. The Beretta family developed a formal governance structure that many modern family businesses would envy. They have a family council, a family assembly, and something called a 'family constitution' — a written document that spells out who can work in the business, who can own shares, and how conflicts get resolved. Luna: A family constitution in the 1500s? That sounds way ahead of its time. Lucas: Well, the constitution as we know it today was formalized in the 1990s, after the near-collapse. But the principles behind it — primogeniture, or at least a clear line of succession — go back centuries. For most of Beretta's history, the eldest son inherited the business. That kept ownership concentrated and avoided the fragmentation that kills so many family firms. Luna: But what happens when the eldest son isn't capable? Or when there's no son at all? Lucas: Those moments have happened. In the 19th century, there was a period when the business passed to a nephew because the direct line had no male heir. The family adapted. The real turning point came in the 1990s, when the company was run by a consortium of cousins who couldn't agree on anything. By 1993, Beretta was on the verge of bankruptcy. Luna: So what saved it? Lucas: A single family member named Ugo Gussalli Beretta. He was a great-grandson of the founder, but he hadn't been running the company — he was a lawyer. In 1993, he took over as CEO and basically staged a coup. He centralized decision-making, cut the number of family members on the board, and brought in outside professional managers for the first time. Luna: He fired his own relatives? Lucas: Not fired, but he stopped them from interfering in day-to-day operations. He also instituted a rule that still stands: any family member who wants to work at Beretta must first work outside the company for at least three years, in a unrelated field. They have to prove they can succeed on their own merit. Luna: That's the dual-track system you mentioned. It's actually pretty common in the more successful family businesses we've covered on this show. Lucas: Exactly. The Mars family does it. The Wallenbergs do it. But Beretta was an early adopter. Ugo also restructured ownership so that shares could only be held by direct descendants — no spouses, no in-laws. That prevented the kind of dilution that happens when a family business gets passed down through multiple branches. Luna: So the constitution locks in control, but how does the family stay unified? I imagine 15 generations of cousins have plenty of disagreements. Lucas: They have a family assembly that meets twice a year. Any family member over 18 can attend. They discuss strategy, elect representatives to the family council, and air grievances. It's not a rubber stamp — there have been heated debates. But the constitution also includes a mediation clause, so disputes don't end up in court. Luna: And the family council — what does that do? Lucas: It's a smaller group of seven to nine members who oversee the relationship between the family and the business. They approve the CEO's appointment — which can be a family member or an outsider — and they have veto power over major strategic decisions like acquisitions or selling assets. But they don't run the company. That's the CEO's job. Luna: That separation of ownership and management is so crucial. A lot of family businesses fail because the family tries to micromanage from the boardroom. Lucas: Right. And Beretta has managed to maintain that separation even through the post-Ugo era. Ugo stepped down as CEO in 2018 and passed the role to his son, Franco Gussalli Beretta, but only after Franco had worked stints at outside companies and earned an MBA. The family council approved the transition. It wasn't automatic. Luna: So here we are in 2026. Beretta is still privately held, still based in Gardone Val Trompia, still making guns. But the world has changed. There's increasing regulation around firearms, especially in Europe. How is the family navigating that? Lucas: That's the interesting recent chapter. In the last two years, the European Union has been tightening regulations on lead ammunition, citing environmental and health concerns. Beretta's core product — shotgun ammunition — traditionally uses lead shot. So the company has had to invest heavily in developing non-toxic alternatives. Luna: Have they been able to adapt without losing their edge? Lucas: They've actually leaned into it. In 2025, Beretta launched a new line of steel and bismuth shotgun shells that meet the new standards. They also acquired a small German company that specialized in eco-friendly primers. The family council approved the acquisition quickly because it aligned with their long-term strategy. Luna: It's a reminder that even a 500-year-old business can't rest on its laurels. They have to evolve with the regulatory environment. Lucas: Exactly. And the fact that they can make that kind of pivot without worrying about quarterly earnings pressure from public markets is a huge advantage. They think in generations, not quarters. Luna: Speaking of thinking in generations — these conversations we have on the show, digging into how these families structure themselves for the long haul, they genuinely change how I think about my own work and planning. And I know we're not alone in that. Lucas: Yeah, I hear from listeners pretty often who say a specific episode has shifted their perspective on something. It's one of those things where if a couple of people get real value from it, that's what keeps us going. And actually, if these conversations have moved your work forward in some small way, there's a simple way to help keep them coming — buy me a coffee dot com slash fexingo. It's just a couple of dollars a month, but for an ad-free independent show like this, it genuinely makes a difference. Luna: Totally. And it's not about a big ask — it's just that those small contributions add up and let us keep the focus on quality rather than chasing sponsors. Lucas: Right. So, back to Beretta — I want to talk about one more concrete mechanism they use that I think is underappreciated: the 'family employment contract'. Luna: Is that different from the outside-work requirement? Lucas: Yes, it's a separate document. Any family member who wants a job at Beretta has to sign a contract that spells out performance targets, reporting lines, and consequences for underperformance. It's the same as any professional employment contract, except it also includes a clause that the family council can revoke the position if the person violates the family constitution. Luna: So no free rides. That must be hard for some family members to accept. Lucas: It is. But it's also why the business has survived. The current generation has about 50 family members who are shareholders, but only a handful work in the company. The rest are passive owners who receive dividends but have no say in operations. That discipline is rare. Luna: And the dividends — how does the family handle the tension between reinvesting profits and paying out to shareholders? Lucas: The constitution sets a dividend policy: no more than 30 percent of net profits can be distributed. The rest stays in the business. That's been a rule since Ugo put it in place in the mid-1990s. It forces the family to think long-term. Luna: So if you're a Beretta shareholder, you're not getting rich quick. But you're building something that your grandchildren can inherit. Lucas: Exactly. And that's the whole point. Beretta isn't just a company — it's a family institution. They even have a museum on site in Gardone Val Trompia that traces the history. The current CEO, Franco, has said that his goal is not to maximize profit but to ensure the company is still there in another 500 years. Luna: That kind of time horizon is almost impossible to imagine. But when you see the discipline around governance, the employment contracts, the dividend policy — it starts to feel less like luck and more like a system. Lucas: It is a system. And the irony is that most family businesses don't put these systems in place until they've already had a crisis. Beretta had its crisis in the 1990s, and they built the system in response. But the best time to build it is before the crisis hits. Luna: So for any family business listening — or anyone thinking about legacy — the takeaway is: write it down. Create the constitution, define the rules, separate ownership from management. Lucas: And enforce it. That last part is the hardest. The Beretta family has had to have difficult conversations — telling a cousin they can't have a job, or telling an uncle that dividends are capped. But that willingness to have those conversations is what makes them a 500-year story rather than a cautionary tale.