WED 24TH APR 2019


Bringing the family business community together

Key Steps To Successful Succession

21st March 2017 Dr. Dominik von Au, PwC Germany

We asked Dr. Dominik von Au who is the Family Governance Leader for PwC Germany to summarise the secret to a successful succession.

Dr. Dominik von Au has extensive experience of working with established family firms to achieve a smooth and effective transition between generations.  We asked him to summarise the secret to a successful succession in terms of ownership and leadership.


Start early

It’s vital to start the process as early as possible. Everyone needs to know what to expect, and what the timetable is, to avoid misunderstandings and unspoken tensions that could lead to outright conflict. This is especially important for family members who are going to be taking executive roles in the future. Our advice is always to transfer shares during the current generation’s lifetime.

Communicate, communicate, communicate

Decisions need to be made by a process of consultation and discussion, not dictated by the owner. Everyone with a stake in the future needs to have a say in it.

Do your homework

Make sure you know the tax and legal implications of your succession plans. Depending on your circumstances and jurisdiction, some approaches may cause difficulties which may not be obvious until it’s too late.

Invest in education

The people who are going to be running the business need the right expertise to do that, but ownership demands specific skills too. Make sure all current and prospective shareholders are educated to become professional and competent owners.

Diversify your wealth

If the retiring generation rely entirely on the firm to provide a retirement income that can put a disproportionate strain on the business. It can also make it harder for the older generation to ‘let go’, because their lifestyle is at stake. So build assets outside the family firm from an early stage. 


Get experience outside the family firm

As the business landscape becomes more complex, it’s vital to bring a broad range of experience to the task of leadership. So develop a career plan that involves working outside, to allow you to acquire the specific skills the family firm needs.

Develop a strategic plan for the medium term

The next generation often see the succession process as an opportunity to modernise the business, and there may indeed be a need to do this. But it’s important to make changes in the context of longer term objectives, which is why it’s vital to have a strategic plan, developed jointly by both the current and incoming generation, and in consultation with all the shareholders.

Broaden the decision-making process

As the business passes from one generation to the next, it’s important to create an organisational structure which isn’t dependent on one single individual. Decisions need to be made collectively, and with proper information and preparation.

Stengthen the role of the Board

The board has a key role to play in overseeing the succession process, and in ensuring that family members are only offered positions they are properly qualified to fill. Membership of the board is a useful way for the retiring generation to make an invaluable ongoing contribution.

Clarify what the retiring generation will do

The current generation needs to have a clear plan for their life after retiring. This will prevent misunderstandings, or the temptation to interfere. Taking on roles outside the family business – in the community, for example – can be both worthwhile and rewarding.

Find out more about the work that PwC do with family firms here


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