The Role of Governance in Family Business Leadership Succession
We are excited to share a recent Special Report: Global Edition from Boyden entitled, “The Role of Governance in Family Business Leadership Succession,” where C.E.O. and Founder of Ferguson Interests, LLC, Rob Ferguson, is highlighted. This insightful article discusses several relevant items of interest to owner-operators of family-owned businesses. Some of the items covered include the Lifecycle of Family Businesses, The Value of Family Businesses, and Leadership Succession Challenges. This special report will help its readers understand some of the processes and best practices that are practical and heuristic approaches to overcoming many of the common challenges facing family-owned businesses today. After reading this report you will have a solid understanding of some of the family nuances that are unique to all family-owned businesses and be better equipped to meet current and emerging needs in your own business.
Below is a short excerpt from the report:
Introduction
Family-owned businesses represent a critical component of economies in all parts of the globe, generating significant business activity and prosperity. However, research suggests that few of these businesses survive into the second generation, and even fewer into the third, fourth or fifth. Beset by internal politics and tension around selecting the next leader, family businesses often follow flawed succession plans, or lack one altogether. As a result, many are unprepared for leadership transition and struggle to demonstrate the value of the business to subsequent generations. This often results in the breakup and sale of the enterprise.
Rigorous governance and oversight through independent board membership provide a critical foundation for family-owned businesses to protect against this vulnerability. By adding independent oversight to the board of directors, family businesses can more effectively choose successors, manage the expectations of family members and, most importantly, successfully manage the leadership transition process.
How can family businesses navigate this process and successfully engage independent directors? What adjustments must the family make to accommodate “outside” directors? What skills and characteristics must independent directors bring to the business? And what will this change in governance mean for the business moving forward?
These are the hurdles family business owners face as they embark upon the often challenging but inevitable process of succession. Drawing upon Boyden’s experience, research, and exclusive in-depth interviews with experts on the topic, this report will unpack the challenges ahead and offer solutions and best practices for cultivating multi-generational family businesses.