The Critical Importance of Succession Planning in Family Businesses
Rupert Murdoch's recent deal to hand over his media empire to his son Lachlan this year underscores the necessity for a comprehensive succession plan to prevent emotional and legal complications. This situation highlights a recurring challenge for family businesses globally.
Walker’s Shortbread, based in Scotland, employs a cousins consortium model that encourages extended family involvement, defining potential managerial roles as the business expands. Their approach emphasizes consensus-based decisions and the engagement of external experts, including professional advisers and non-family directors on an executive board, to ensure robust governance.
Dr Bronner’s founder Emanuel Bronner did not establish formal succession paperwork. However, current leadership stresses the importance of planning to preserve the family's mission for future generations, noting a growing interest from the next generation in assuming leadership roles.
In Toronto, Mark Michelin of St James Town Steak and Chops is actively training his two sons, Noah and Alex, to take over the business. He focuses on maintaining the family legacy and appealing to customers who value the family bond.
Nicky Walker of Walker’s Shortbread describes owning a generational family business as a privilege and emphasizes the need to provide unwavering support and guidance to the next generation to maintain a unified voice.
Despite these examples, governance challenges persist widely. A Robert Half survey conducted in Canada reveals that over 40% of business leaders have not identified a successor despite planning to step down. Furthermore, a 2025 report warns that the absence of succession planning could lead to increased business closures, job losses, and economic uncertainty.
These insights collectively stress that proper succession planning is vital not only for the continuity of family businesses but also for the broader economic stability.
