Succession Planning Crucial for Family Firms to Avoid Economic Risks
A significant Murdoch deal planned for 2025 with his children to end a long-running succession battle underscores the importance of clear succession planning in family businesses.
Several family firms exemplify approaches to succession. Walker’s Shortbread in Scotland, founded in 1898 by Joseph Walker, now generates annual revenues above £200 million. Its great-grandson, Nicky Walker, became managing director in 2022. The company employs a 'cousins consortium' model that encourages wider family participation, supports consensus-driven decision-making, and allows for external advisors and non-family directors.
In the United States, Dr Bronner’s in California faced challenges after founder Emanuel Bronner died without formal succession paperwork, resulting in a $2 million tax bill. Current leader Mike Bronner emphasizes the importance of planning for two generations ahead; his son Eli aspires to be CEO.
Toronto’s St James Town Steak and Chops, a 54-year-old family business, is preparing Mark Michelin’s two sons, Noah and Alex, to take over. The firm highlights the importance of family heritage, which customers value highly.
However, succession planning can be complicated by emotional and personal dynamics. Charlie Grubb, a senior adviser from Robert Half, recommends separating family relationships from leadership roles and instituting governance frameworks that clearly distinguish family membership from leadership positions.
A 2025 report warns that the absence of succession planning may lead to more business closures, resulting in job losses and economic uncertainty. Additionally, a Robert Half survey in Canada found that over 40% of business leaders have not identified successors to take over their roles, posing risks for the continuity of family businesses.
