Who will take over
Who will take over?
Chapter twoWho will take over?
The Future of Family Business
Succession emerged as the central issue running through almost every interview. The challenge facing many families is no longer simply building successful businesses, but determining who will lead them next.
The succession challenge
One-third of family business owners believe a lack of a suitable or willing successor could ultimately end family ownership.
This concern becomes even more significant when viewed alongside the broader confidence findings. While most owners remain confident about the next few years, confidence falls dramatically over a ten-year period, suggesting succession may represent one of the biggest long-term risks facing family businesses.
Interviewees described younger generations having more opportunities, broader career ambitions and less of an automatic attachment to the family business than previous generations. One family business governance and succession specialist repeatedly highlighted the importance of willingness and capability, noting that ownership alone does not create leadership; effective succession increasingly requires preparation, development and planning. According to a senior adviser to family businesses and family offices, recent inheritance tax reforms have accelerated succession conversations, prompting many families to address ownership, governance and wealth-transfer questions earlier than they might otherwise have done.
The Russell-Cooke perspective
One issue that is discussed far less openly is the burden of succession itself.
Sarah Arnold
Trusts and estate disputes
Many family business disputes begin with a simple problem: families confuse equality with fairness. A founder may have several children with different skills, levels of involvement and ambitions, yet still want to treat them all equally. Add spouses, future generations and competing expectations into the mix, and it becomes easy to see how tensions arise.
One issue that is discussed far less openly is the burden of succession itself. Many children feel a responsibility to continue a family business, whether or not that is what they genuinely want, and what is in the best interests of the business. At the same time, some founders can struggle to step back because the business represents much more than a financial asset; it is often central to their identity.
A family business itself is often much more than a business – it is a bind that keeps families and communities together and I do think should be protected, so far as possible but not at all costs. In some situations, families would benefit from discussing the future beyond succession. For example, giving the next generation freedom to sell the business, rather than preserving it at all costs, can remove pressure and prevent resentment from developing into dispute. It may, in some cases, also provide a better financial result for the family.
Director of a long-established family business
For one long-established family business, succession was viewed as a process rather than a single event.
Rather than assuming the next generation would automatically step into a leadership role, responsibility was introduced gradually over a number of years. The future successor was given opportunities to develop independent client relationships, lead new areas of the business and establish credibility in their own right.
This approach allowed leadership capability and confidence to develop before any formal transition took place. By the time succession became a reality, colleagues, clients and advisers already recognised the successor as a leader, rather than simply a family member inheriting a position.
Perhaps the most important lesson was that effective succession requires action from both generations. While the next generation must be prepared to step forward, the current generation must also be willing to step back and create space for new leadership to emerge.
The experience highlights that effective succession is rarely about transferring shares alone. It requires trust, preparation, clear communication and a willingness to allow the next generation to build their own identity within the business.
Key lesson: effective succession is not simply about transferring ownership. It is about building the credibility, capability and confidence needed for the next generation to lead effectively.
Why governance matters
Throughout the interviews, governance emerged repeatedly as a survival mechanism. For family businesses, governance is not corporate bureaucracy, but essential to establish clear expectations before problems arise.
Interviewees discussed:
- who should own shares
- who should lead
- how decisions should be made
- what happens when circumstances change
Families that discuss these questions early appear better placed to manage transition successfully. One adviser noted that governance structures such as family charters are most effective not as documents in themselves, but as mechanisms for encouraging meaningful conversations and alignment between family members.
The research indicates that businesses with stronger governance and succession arrangements are often better positioned to navigate change and maintain continuity across generations.
The myth of automatic succession
Historically, family businesses often assumed ownership would naturally pass from one generation to the next, but the research suggests that assumption can no longer be taken for granted.
Many business owners are increasingly viewing businesses as sources of family wealth rather than assets that must necessarily remain family-owned forever. Almost 30% of survey respondents said an attractive acquisition offer could end family ownership, while others highlighted financial pressures or succession concerns.
The question increasingly being asked is not simply “how do we keep the business?” but “should we?”
The Russell-Cooke perspective
The earlier conversations begin, the easier it becomes to align expectations and avoid conflict later.
Katie Longmate
Family law
In family businesses, disagreements are rarely about shares, structures or legal documents alone. More often, they stem from differing expectations between family members.
Parents, children and siblings may all want the business to succeed, but they do not necessarily share the same vision of what success looks like. One of the greatest risks is that assumptions go unchallenged for years, only to emerge during succession planning or following a significant life event such as divorce.
Facilitated conversations can play a valuable role here. Families often need a forum where everyone feels able to express their views openly and honestly, particularly where traditional family dynamics mean some voices are heard more readily than others. Fairness and equality are not always the same thing, especially when some family members are actively involved in the business and others are not.
The earlier those conversations begin, the easier it becomes to align expectations and avoid conflict later.
Preparing the next generation
The most effective succession stories involved gradual preparation rather than sudden transition.
The daughter of a Director and former Chair of a long-established family business we spoke with was given real responsibility and developed independent relationships before eventually becoming leader. The owner of a growing second-generation family business has begun exposing the next generation to business discussions and decision-making long before any transfer occurs. These examples demonstrate that ownership can be transferred quickly, but leadership takes much longer. In addition to this, a senior adviser to family businesses and family offices highlighted the benefits of introducing future leaders gradually through minority shareholdings, board participation and increasing responsibility, enabling successors to build both experience and credibility before taking control.
How do you keep one family moving in the same direction once everyone has different lives?
Family business governance and succession specialist
Five questions every family should ask before succession
Does the next generation actually want the business?
Many succession plans fail because families assume interest rather than discussing it openly. A successful transition starts with understanding whether the next generation genuinely wants to take on the responsibility of ownership and leadership.
Are we preparing successors or simply naming them?
Being related to the founder does not automatically prepare someone to lead. Families should consider whether future leaders have the experience, credibility and support they need to succeed.
Have we agreed who makes decisions and how?
Ownership and control are not always the same thing. Families should have clear discussions about leadership, voting rights, governance structures and how disagreements will be resolved.
What happens if circumstances change?
Illness, retirement, divorce, death or changing family relationships can all disrupt succession plans. Families should consider whether their arrangements would still work if the unexpected happened.
What are we trying to preserve?
Is the goal to preserve the business itself, family wealth, the family name, shared values, or a combination of all four? Understanding the long-term objective makes succession decisions much easier.