When Family Owners Became Managers

The duPont family has often shown a flair for business management, most notably in the case of Pierre S. duPont II, grandson of the founder, who ran the Delaware company from 1902 to 1928.

In his time, Pierre transformed DuPont from a family company to a large-scale enterprise by giving it modern financial accounting systems and the beginnings of public and government relations.

In World War I, DuPont--the world’s largest manufacturer of explosives--supplied artillery to the U.S. forces and their allies. The company and the family’s fortune grew tremendously from the conflict, and afterward, both parties had to withstand depictions as war profiteers from a disillusioned public.

Pierre pushed DuPont into the then-high-tech chemical industry in the 1920s. And he had the foresight to bail out an entrepreneur named William C. Durant whose idea for a large and varied automobile company was foundering in 1917.

Pierre purchased 27% of General Motors stock and hired Alfred P. Sloan to run the company. He also sent over DuPont’s own accountant, Donaldson Brown, to devise GM’s system for allocating investment and monitoring costs--a system that served as a model for world industry for decades. DuPont sold its GM stock between 1962 and 1965 under threat of antitrust action by the U.S. government.

The family has also produced a great scholar of business, Alfred duPont Chandler, now a Harvard professor emeritus, as well as Pierre S. duPont IV, former Delaware governor and 1988 presidential candidate.

Today, hundreds of family members own an estimated 15% of the company, and though family members sit on DuPont’s board and hold operating positions in the company, management is by non-family professionals--a modern innovation that Pierre duPont II would surely approve of.