The CEO and Chairman of a family business play distinct yet interconnected roles within the organisation, shaping its governance and strategic direction. The CEO, or Chief Executive Officer, is responsible for day-to-day operations, implementing strategies, and ensuring the company's overall success. In contrast, the Chairman focuses on the board of directors, governance structure, and long-term vision. The CEO, often a family member, is at the forefront of decision-making, leading the execution of business plans and managing the company's resources. This role demands a deep understanding of the industry, effective leadership skills, and the ability to navigate complex operational challenges. In a family business, the CEO often balances familial relationships with professional responsibilities, requiring a delicate blend of personal and strategic acumen. On the other hand, the Chairman presides over the board of directors, providing oversight and guidance. This role is crucial for maintaining a balance of power, ensuring ethical practices, and safeguarding the interests of shareholders. While the Chairman may also be a family member, their primary focus is on governance, strategic planning, and risk management. One key distinction lies in the temporal scope of their responsibilities. The CEO is immersed in the day-to-day affairs, tackling immediate issues, and steering the company toward short-term goals. In contrast, the Chairman adopts a more future-oriented perspective, contemplating the organisation's trajectory, succession planning, and sustained growth. Conflict resolution is another aspect where their roles diverge. The CEO often deals with operational disputes and management challenges, striving for efficiency and profitability. The Chairman, however, addresses governance-related conflicts, ensuring that the board functions cohesively and aligns with the company's long-term vision. Succession planning is a critical area where the roles intertwine. Both the CEO and Chairman contribute to developing a robust plan for transitioning leadership within the family business. The CEO focuses on grooming potential successors within the operational realm, while the Chairman oversees the broader governance aspects, ensuring a seamless transition that aligns with the organisation's strategic goals. In conclusion, the family business CEO and Chairman serve complementary yet distinct roles. The CEO is the operational leader, steering the company through daily challenges, while the Chairman focuses on governance, long-term vision, and board oversight. Balancing these roles effectively is essential for the success and sustainability of a family business, especially when familial ties intersect with professional responsibilities.

The world remains a volatile place in 2023, as businesses emerge from the COVID era, contend with the impact of geopolitical uncertainty, grapple with the challenges of supply chain disruption and high inflation. At this challenging time for boards the focus is on the pivotal role of the leader of the board – the chair or chairman – to help navigate the board through these uncertain times to business success. However, the speed of external change requires an evolution in the role of the chair of the board to be an impactful leader and to ensure an effective board. Working closely with boards and chairs has led us to identify how the characteristics that deliver chair effectiveness have evolved. Time To Move Beyond The Traditional Board Hygiene The old adage that a good chair runs a good meeting is now simply not enough. The most effective chairmen today manage board processes from meetings through agendas, papers and minutes, along with other board specific procedures. The role demands the chair brings an ability to make sense of things, together with the courage and integrity to take and lead the board through tough decisions. For example, the decision to part company with the current CEO. Furthermore, the chair should provide “air cover” where necessary, which means protecting the group from the individual and the individual from the group. For example, the chairman may step in and provide “air cover” to prevent an over eager board tearing apart a proposal from management which if presented now would be premature and half-baked, when management needs time to work on the proposal to get it right. Role Clarity Those chairs who are clear about their role are the most effective, particularly in understanding where their role stops and the CEO, as the leader of the business, begins. They should also know their responsibilities in ensuring the board delivers good governance and their function in any crisis. As a priority, chairmen must have a very clear view of the value that they are going bring as the leader of the board, including their view of good performance and accountability. As a result, the move from a mindset of “director tenure” to one of individual director and board contribution needs to be led by the chair. The Chair As A Leader: The Personal Characteristics Of Effective Chairs Thoughts on the characteristics of effective chairs evolve with time and circumstance. Andrew Kakabadse and Ali Qassim Jawad have identified five key leadership intelligences in their 2019 book – The 5Q’s for thriving as a leader. These five leadership intelligences addressed the need for contemporary leaders to bring: Intellectual capability Ethics (moral quotient) The ability to use and gain influence (political quotient) The ability to recover from setbacks (the resilience quotient) Emotional intelligence In our experience of working with effective chairmen in today’s environment three additional “intelligences” are demanded: agility, adaptability and the understanding of the practical, profitable application of digital technology to deliver better outcomes – the digital quotient. It’s effective chairs that foster a culture of agility and adaptability on the board. This requires them to promote an entrepreneurial spirit both on the board, and beyond – with the help of the board – to the management and the wider workforce. This way the potential of directors and employees to provide new ideas to help take the business forward is unleashed. Furthermore, chairs must bring to the board digital intelligence. Not only in the employment of digital technology in a virtual world of board meetings, portals and information flows, but more importantly by bringing a practical understanding of the profitable application of digital technology to business to deliver better outcomes and returns. The Chair As A Facilitator One of the most important attributes of any chairman is to be a good facilitator. They listen, bring emotional intelligence and self-awareness. In fact, the traditional “command and control” approach by the chair needs to evolve to a more facilitative leadership – one that embodies emotional intelligence. Those chairmen who are emotionally intelligent are empathetic and have self-awareness when communicating; enabling them to build engagement, generate trust, respect, and provide leadership. They can also counsel and supervise the board in a way that helps to steward the creation of value. This way they can create and nurture a board culture of psychological safety, where bad news travels to the board more rapidly than good, where directors have the courage to constructively challenge, and where it is fine not to have all the answers, particularly during these difficult times. Additionally, board and governance success demands three critical currencies – trust, honesty and respect. The governance system breaks down if any one of these currencies is absent. It is an essential task of the chair to create and enable a culture which builds these values on the board. The Critical Role Of The Chair In Relationships Effective relationship skills and competencies are demanded of chairs today, particularly because they have a vital role in managing the complex array of relationships of those on the board. The most important relationship is between the leader of the board – the chair – and that of the business – the CEO. It is one which demands role clarity, a friendly tone, but with the professional distance that the CEO and chair can never be, or be seen to be, friends. If the board or shareholders lose confidence in the chair to hold the CEO to account and, if need be, replace the CEO, then the board will lose confidence in both the chair and the CEO. This is not a good state of affairs for any organisation. Additionally, if the relationship between the chair and CEO is not working, one, or both, will usually end up leaving the organisation. Chairmen must nurture a whole series of important relationships to enable the board to be effective: from the corporate secretary – a vital link to board processes – through to committee chairs, senior or lead independent directors and members of the management team who frequently present to the board. Beyond the boardroom and management team successful chairmen spend time and energy cultivating effective relationships with the owners of the business, be they shareholders or members, and other key stakeholders that are priorities for the board. For example, major donors in a not for profit organisation, regulators, etc. Effective Chairs Are Future Focused At the most basic level effective chairs bring a strong, intuitive sense of when, how and where an issue will “land,” which helps them to guide the board and anticipate next steps. On a deeper level, they have a very clear view of the value that their leadership will bring – the priorities, the deliverables and the workplan at board and committee level – to enable value creation. Chairmen must focus on developing the board, the CEO and themselves to increase the capacity, capability and effectiveness of the board, and ensure that the board, the governance of the organisation and the leadership of the business are “fit for the future”. This means chairs need to promote regular reviews focused on the effectiveness and performance of the board, individual directors and the CEO – something that is essential to good governance. It is the role of the chair to ensure that the assessment is objective, and if performed externally, that the reviewer is free from conflicts of interest. Most importantly, they must make sure that there is accountability for follow up on the agreed actions to improve board effectiveness. Future Focus: Succession Planning Ensuring there is good succession planning for the CEO, committee chairs, directors and their own role is a must for chairmen. The succession planning should be appropriate and relevant to the organisation and needs to be reviewed at least annually to assess progress and development based on the context of the board, the CEO and the organisation. During challenging times effective succession planning delivers an all-important smooth transition in the leadership of the organisation with minimal disruption and business continuity. Future Focus: Risk The pandemic has highlighted the failure of many boards to effectively understand and predict risk. The chair’s role is to support the board in understanding risk, set the risk appetite, structure for risk management, ensure that risk is being mitigated, managed and monitored, and to challenge assumptions around it. Beyond this the chair must recognise that effective risk management is not solely about avoiding losses, but in enabling value creation through looking at risk as an opportunity. Risk planning can provide a new opportunity, a competitive advantage, to drive long term business success. After all, boards are charged to generate the best return from the capital of the company, which calls for forward thinking and the ability to anticipate the impact of uncertainty on outcomes. The Emerging Role Of The Chair In The Culture Of The Board Setting the board culture “the way we do things around here” or “what we do when no one is looking” is the primary role of the chair. Board culture can be a source of advantage where it is open, enabling and provides the appropriate environment for constructive disagreement in a psychologically safe environment where people can disagree but never be disagreeable. A Culture Of Inclusion   Diverse boards bring different perspectives, generate better decisions and outcomes than those that aren’t. As a result, chairmen need to look at the board through the prism of the five drivers of diversity™ – demographics, skills, experience, thinking styles and circles of influence – and consider how well the current line up matches up. Though it’s important to highlight that diversity on boards is an illusion without inclusion. Therefore, the role of chairs today is to create an environment on the board where every participant feels welcome, wanted, respected, valued and listened to. This moves diversity beyond the veneer of tokenism to enable the culture on the board to be one of inclusion, to gain the benefit of the different viewpoints brought to decision making by a diverse board. To sum up, effective chairmen today need to be more like a hospitable dinner party host who ensures that everyone feels welcome, wanted, listened to and respected. About the Author - John Harte is the Managing Partner at Integrity Governance and leads a global team that is focused on making boards more effective. A boardroom expert working with multinationals and SME’s, he provides practical, impartial advice to directors, business owners and CEO’s to help improve performance. He is a regular speaker and thought leader on board effectiveness, practical governance and business disruption. John grew up in a family business and his extended family run fifth generation businesses and he has also served as a board member, chairman and adviser to many family firms. He also worked within Mars, a globally recognised family business for the best part of a decade.

Family business chairman plays a pivotal role in steering the course of the company, balancing familial ties with corporate responsibilities. Firstly, they must embody strong leadership, guiding the business through strategic decision-making and fostering a cohesive vision. Additionally, effective communication is paramount, as the chairman must bridge the gap between family dynamics and professional obligations, ensuring transparency and understanding. Financial stewardship is another critical aspect of the chairman's responsibilities. They must navigate the delicate balance of family interests and the company's fiscal health, making sound financial decisions that sustain the business in the long run. Moreover, succession planning falls within their purview, necessitating the identification and development of capable family members to carry the torch. In terms of governance, the chairman plays a key role in establishing and maintaining ethical standards, thereby safeguarding the family business's reputation. Conflict resolution becomes a delicate skill, addressing disputes diplomatically and preserving familial bonds. Striking the right equilibrium between family harmony and corporate performance requires adept decision-making and emotional intelligence. Adaptability is crucial as family businesses evolve. The chairman must embrace innovation, steering the company through technological advancements and market shifts. Additionally, fostering a culture of inclusivity ensures that non-family employees feel valued, contributing to a harmonious work environment. Ultimately, the core roles of a family business chairman revolve around leadership, effective communication, financial acumen, governance, conflict resolution, succession planning, adaptability, and inclusivity. Mastering these facets ensures the chairman not only preserves the family legacy but also propels the business forward in a competitive and dynamic landscape.

With more than five million family firms across the UK and a large majority of them taking a long term view, it is no surprise to see them looking to export markets to secure new opportunities to grow. Family firms that do export take the necessary steps to investigate opportunities fully prior to embarking on the decision to export, but with the current uncertainty prevailing around the brexit negotiations and potential US trade tariffs, it is likely that we will see more British family firms seeking to make the most of their opportunities overseas. Some family firms have been exporting for many years and we spoke to a number of them to gauge the importance of exporting to their businesses. Scotland’s largest producer of jam and marmalade, Mackays Ltd is best known for its household name brands – Mackays and Mrs. Bridges. Since humble beginnings in 1938, Mackays has remained true to making every jar of its marmalade, jam and curd in the authentic way. The taste is truly recognisable – a combination of delicious real fruit and the use of traditional techniques such as hand-stirring and the iconic copper bottom pans, which, like Mackay’s world-famous Marmalade, are Dundee-made. Fast forward to 1995 and the business was owned by United Biscuits. After a 27-year career with United Biscuits; Paul Grant – latterly the HR Director for McVities bought the business from his employer at a the time when they employed 19 people and had no branded products but was the last remaining producer of the iconic Dundee Orange Marmalade, in the Dundee area of Scotland, the home of marmalade. This key feature was used to build the business and its brand. In 2000 the “Mackays” brand was launch and Mrs Bridges was also acquired. Since then, Paul and his son Martin have grown the business and now employ a staff base of 180 local people and produces over 25 million jars a year; soaring from a humble 10,000 in 1995. Under the watchful eye of Managing Director, Martin Grant, the last seven years have seen the firm enjoy considerable success; both at home and abroad. With turnover increased from £6.8 million to £18.2 million since Martin took to the helm in 2012, the growth of the business shows little sign of slowing its marmalade and jam-fuelled trajectory. With 30% of its sales coming from export, Mackays Ltd products are available in 80 territories worldwide, including far-flung reaches such as the Galapagos Islands and Japan. In the last year alone, business turnover grew by 7%, including an increase of 25% in export revenues. As Paul Grant confirms, “Exporting can be a fantastic opportunity and although it will complicate your business it can also create significant sales opportunities . One thing that is for sure, having unique brand and product features like those associated with our business, are key to profitable export success.” Another family firm with an eye on the export markets is Fracino which established in 1963 is a family owned and run business that is home to three generations of the Maxwell family. Founder Frank is the company’s chairman; his son Adrian is the MD, and his daughter Rebecca is the service support manager. Fracino is the UK’s sole manufacturer of cappuccino and espresso machines. Since launching an export arm in 2008 to take advantage of the weak pound, award-winning espresso coffee machine manufacturer, Fracino, now exports to over 70 countries via a 40-strong distributor network. Exporting is vital to the growth strategy and sustained success of the Birmingham –based family firm which produces almost 5,000 machines annually in a market traditionally dominated by Italian and Spanish manufacturers. International sales from distributors and global brands, including SUBWAY®, currently make up 25% of turnover and Fracino is on track for exports to constitute 50% of total sales by 2018. MD, Adrian Maxwell adds that “Our export vision has been underpinned by continued innovation and a multi-million pound investment programme which we’ve forged ahead with in spite of the uncertainties of Brexit. We’ve always looked further afield than Europe to maximise global opportunities and would urge fellow exporters to do the same. This strategy has brought 25% sales growth in the last 12 months from existing distributors in countries including Slovakia, Australia, UAE and Chile. We’re also making inroads in new countries such as South Africa and Taiwan which will help to drive our sustained success.” Environmental Street Furniture (ESF) is a Northern Ireland based, global designer and supplier of street furniture and site furnishing products. The company was established by husband and wife, Alan and Caroline Lowry in 2012 and after servicing the local market with street furniture products, the company set upon an aggressive export campaign to establish the ESF brand globally. Harnessing new innovation and technologies, ESF quickly gathered a reputation for offering unparalleled and never before seen expertise and with the launch of their ‘Style Collection’, a range of street furniture products for the themed experience attraction industry, the company had the opportunity to supply products to some of the world’s largest and most successful theme parks in the USA, Middle East and Europe. The themed attraction industry is now one of the company’s most successful markets. ESF Managing Director, Alan Lowry is aware that without the ability to export, the company would not be the success it is today. Alan said, “Having the opportunity to export makes us accessible to clients globally and as a result, we have seen significant growth in terms of the products we supply to an international market. We have been fortunate enough to work with clients as far away in Australia and United States of America, the Middle East and Europe as well as in the UK.” Alan continued, “We have received excellent support from Invest Northern Ireland and the UK Department for International Trade (DIT) to establish ourselves globally and this cements our position as a prestigious supplier to the international market. Our export sales have increased year on year and we want to continue this going forward, which is why we have a dedicated executive to lead and support our overseas export efforts.” In 2017, ESF had successfully secured business in 22 countries across five continents and this is something the company are intent on developing for many years to come. Some people assume that exporting is not an option for them whereas in reality, exporting is an opportunity that many family firms take up, and do very successfully, from all sorts of business sectors too. There are also some great UK family business exporters that really do help put the family business sector on the global map – take the likes of JCB, Walkers Shortbread, Macsween, Kinloch Anderson and The Morgan Motor Company to name a few. All family firms that succeed at exporting have clear strategies in place to minimise the risk and maximise the opportunities and it may sound obvious, but it is really important to do all the necessary due diligence and to seek appropriate advice before starting.

Family businesses are the backbone of many economies, blending personal connections with entrepreneurial drive. Yet, as these businesses grow, they can sometimes strain the very relationships that make them unique. Balancing business demands with family harmony is both an art and a science. It’s important to nurture family bonds while scaling your business. Balancing the demands of growing a family business with maintaining strong personal relationships requires thoughtful strategies to ensure both your family and your business thrive. Prioritise Communication Effective communication is the cornerstone of any relationship, especially in a family business. Regularly scheduled meetings can help separate business discussions from personal interactions. Setting boundaries is essential; reserving specific times for family-only conversations ensures business matters do not dominate every family gathering. Additionally, active listening fosters understanding and respect by showing genuine interest in each other’s ideas and concerns, whether they relate to the business or not. Define Clear Roles And Responsibilities Ambiguity can create tension, so clearly delineating roles ensures everyone knows their place and contribution within the business. Assigning roles based on individual skills and interests rather than seniority or tradition allows for better efficiency and harmony. Formalising hierarchies is equally important, as even in a family business, professional accountability and a clear chain of command help prevent disputes over decision-making authority. Celebrate Successes Together Taking time to celebrate milestones strengthens family bonds and provides an opportunity to reflect on shared achievements. Hosting team celebrations where family and non-family employees feel equally appreciated reinforces unity within the business. Embrace Conflict Resolution Disagreements are inevitable in any business, but in family business, they can quickly turn personal if not handled carefully. Addressing issues early and professionally is key. Holding difficult conversations in a neutral setting can help maintain objectivity. Seeking the advice of an experienced family business advisor can provide the independent guidance you may need. Respect Work-Life Balance Although growing a business often demands long hours and sacrifices, maintaining a balance between work and personal life is crucial for sustaining strong family relationships. Scheduling dedicated family time, even during busy periods, helps reinforce the importance of personal connections. Avoiding the mixing of roles—such as bringing work disputes into personal settings—further ensures that family bonds are not strained by professional challenges. Plan For The Future Together Growth often brings new challenges, including succession planning and expanding operations, which require collective family input. Engaging the family in creating a shared vision for the future helps align everyone’s goals and priorities. Involving younger generations fosters a sense of ownership and responsibility, while bringing in professional advisors can provide objective guidance on financial, legal, and operational decisions. Keep Perspective In the pursuit of business success, it is easy to let work demands overshadow the importance of family. Stepping back to reflect on the reasons for starting the business can help maintain perspective. Revisiting shared goals as a family strengthens connections and reminds everyone of the bigger picture. Continuing family traditions, even during periods of business growth, helps preserve the legacy and love that define the family’s identity. Balancing family dynamics with the complexities of running a family business is no small feat, but with intentional effort, it is achievable. After all, success in a family business isn’t just measured by profits, it’s about sustaining the legacy and love that make your family unique.

While the idea of working with loved ones can be deeply rewarding, it also comes with unique complexities that can test even the strongest bonds. Balancing the demands of running a business with the dynamics of family relationships isn’t something you learn in school. Unlike leadership, finance, or marketing, there’s no formal curriculum for navigating the emotional and interpersonal challenges of blending love and business. While the idea of working with loved ones can be deeply rewarding, it also comes with unique complexities that can test even the strongest bonds. Yet, with the right mindset and strategies, family businesses can thrive. By recognising and addressing common mistakes, you can build a business that not only succeeds financially but also strengthens family ties and creates a lasting legacy. Let’s explore five common family business mistakes—and how to avoid them—to ensure both your family and your business prosper together. 1. Avoiding Tough Conversations Family businesses often avoid difficult discussions about topics like succession, roles, and compensation. Why? Because they’re emotionally charged. However, avoiding these conversations creates a ticking time bomb that can explode at the worst possible moment. The solution involves open, structured communication. Regular family meetings can create a safe space to discuss pressing issues. Use neutral third parties, such as family business advisors or mediators, to facilitate conversations and ensure everyone feels heard. It’s a great idea to document decisions to avoid misunderstandings later. A family charter outlining agreed-upon values, roles, and rules can be invaluable. 2. Blurring The Lines Between Family And Business When personal relationships and professional responsibilities overlap, emotions can run high. It’s easy for disagreements at work to impact family gatherings—or for familial favouritism to disrupt business operations. It’s important to set clear boundaries. Treat the business as a business, with formal processes and structures in place. Establish clear job descriptions, performance expectations, and reporting lines for everyone, including family members. Encourage merit-based promotions and evaluations. This helps maintain professionalism and ensures the most qualified person fills each role, family or not. 3. Neglecting Succession Planning One of the most sensitive yet critical aspects of a family business is planning for leadership transitions. Too often, families put this off, leading to confusion, power struggles, or even the demise of the business. Start succession planning early. Identify potential successors and involve them in leadership training long before a transition is necessary. Communicate the plan to the entire family to set clear expectations and avoid surprises. 4. Failing To Balance Tradition And Innovation Family businesses are often steeped in tradition, which can be both a strength and a limitation. Clinging too tightly to “the way we’ve always done it” can stifle growth, alienate younger generations, and make the business less competitive. Balance respect for tradition with a willingness to innovate. Empower the next generation to bring fresh perspectives and modern solutions. Encourage ongoing education and exploration of industry trends. Establish a culture of continuous improvement. Invite family members to collaborate on blending legacy practices with forward-thinking strategies. 5. Prioritising Business Over Relationships It’s easy for the demands of the business to overshadow family relationships. Over time, this imbalance can erode trust, create resentment, and damage the very bonds that make your family business unique. Prioritise family harmony alongside business success. Celebrate wins together, but also invest in time away from work to nurture personal relationships. Create traditions that strengthen the family unit, independent of the business. Support when needed. Family coaching or advice can be invaluable for addressing unresolved tensions and building stronger connections. Thriving Together At its best, a family business represents a group of people aligned in their mission to achieve financial prosperity, family harmony, and generational continuity. However, achieving this balance requires intentional effort, education, and proactive management of the “family” side of the equation. Remember, while the stakes are high, the rewards are even greater. Families in business together can thrive—when they invest as much energy into their relationships as they do into their operations.

Succession: The ultimate test of a family business. Every family business faces a moment of truth. It’s not when the next quarter’s results come in, or when a new competitor appears - it’s when one generation begins to hand over to the next. Succession is the ultimate test of a family business. It’s not just a handover of shares or titles, but of values, responsibility, and legacy. It’s the point where heritage meets the future, and where even the strongest enterprises can come undone. Get it right, and you pass on more than wealth. You pass on purpose. Get it wrong, and the cracks can run deep - through governance, through relationships, through the very fabric of the family itself. There’s no manual for getting succession ‘right’. Every family business is unique - shaped by history, personality, and pride. But there are patterns to look out for. Quiet, enduring truths that have guided families who’ve lasted for generations. These aren’t ‘rules’. They’re observations and provocations - distilled from the wisdom of those who’ve navigated this before. They’re simple, but not easy. And they matter most when everything feels uncertain. So what are the 10 truths: 1 - Know Your Why Purpose outlasts personalities. It anchors decision-making, guides leadership transitions and gives the next generation something bigger than themselves to protect. A family business without purpose drifts, but one with a clear ‘why’ endures. Question to consider: How can you ensure the next generation understand why this business exists, and why that matters – long before they take the reins? 2 - Leave It Better Stewardship is the job. Each generation’s role is to strengthen what they’ve inherited - financially, culturally, and strategically - so they hand over something more resilient than they found. Question to consider: What will it mean, in practical terms, for your generation to hand over something stronger, clearer, and more resilient than you inherited? 3 - Keep the Family Together Egos and factions destroy value faster than market shocks. Succession succeeds when relationships stay intact. Unity is the hidden balance sheet. Question to consider: What do you need to do now to protect the relationships that hold your family and business together when the pressure of succession begins? 4 - Talk Straight Readiness, capability, expectations - these conversations are hard, but silence fractures families. Honesty builds trust, even when the truth is uncomfortable. Question to consider: What conversations about readiness, capability, or expectations are you avoiding, and what might happen if you keep avoiding them? 5 - Earn Your Place You can inherit the name, but not the respect. In the best family firms, contribution trumps entitlement, and each generation earns its role through performance and integrity. Question to consider: How do you balance opportunity and merit, ensuring each family member earns their role rather than inherits it? 6 - Pass the Baton, Not the Burden Succession isn’t about replacement, it’s about renewal. True leaders prepare others to lead, then step aside with grace. Passing on opportunity, not obligation. Question to consider: Are you preparing the next generation to lead, or just to take over? 7 - Separate the Tables Family is family. Business is business. Clear boundaries - in governance, decision-making, and communication - protect both. Question to consider: Where does ‘family’ end and ‘business’ begin? And are those boundaries clear enough to protect both today? 8 - Hold the Standard What you tolerate, you teach. Set a high bar for leadership, accountability, and culture. Standards are part of the inheritance. Question to consider: What standards of behaviour, performance, and governance will define your legacy, and how visibly are you living them today? 9 - Create Space to Grow Control feels safe, but trust builds strength. The next generation needs room to experiment, stumble, and rise. That’s how they earn both confidence and credibility. Question to consider: Are you giving the next generation enough room to experiment, fail, and learn? Or are you protecting them so much that you’re holding them back? 10 - Protect the Story Your story is your identity. Write it down and pass it on, so each generation understands what they’re stewarding. Not just the business, but the meaning behind it. Question to consider: If someone new joined tomorrow, could everyone in your family tell the same story about what this business stands for, where it’s come from and where it’s going? Succession isn’t an ending. It’s a renewal. Every generation writes its own chapter. But the story only continues if someone believed it was worth the fight. The families who get it right don't just pass on wealth, they pass on purpose – and the conviction to protect it. That's not just succession. That's legacy.

Every business has its own unique culture but never more so than within a family business. Family businesses feel different, and a strong family business culture can inspire high levels of engagement and commitment from employees. Beverley Mitchell from Beverley Mitchell Consulting shares 8 tips with us about how you can utilise your own unique culture to drive long term business effectiveness and success. 1. Consider your culture and values as a whole. This is your Unique Selling Point. Understand how your culture differentiates you from your competitors and ensure that your existing and potential customers, employees and suppliers understand that too. 2. Many family businesses are now into their third or fourth generation. This provides the business with stability, dependability, trustworthiness and reliability. All of these are highly attractive characteristics when it comes to winning new customers, suppliers and employees. Ensure you maximise these by regularly communicating these qualities. 3. Family businesses can offer benefits and rewards to their employees which are above and beyond other companies. For example, profit share schemes, holiday accommodation available to employees for free or at significant discounts, long service awards. Ensure that you regularly communicate these additional benefits to your current employees as well as sharing this information with potential employees. 4. Family businesses often have many long-serving employees. Identify ways to make their experience and expertise count. Get the long serving employees to act as ‘buddies’ for new joiners or mentors for developing employees. Make sure you use knowledge management systems to capture and share their experience and expertise across the wider business and for future team members. 5. In the battle to win and retain talent, people are looking for the best work life balance they can find. Family run businesses that leverage their ‘family focus’ are in a unique position, so make sure you make the most of this aspect when you recruit. 6. Engaging with staff socially helps. Family businesses that manage and promote the social engagement of their employees with social events such as BBQ’s or smaller social gatherings, should ensure these are promoted during recruitment as examples of how their business rewards and recognises its employees. 7. Family businesses tend to take the long view when it comes to investing in the company’s development rather than constantly looking for short-term gain to please external shareholders. Consider the benefits that this long-term view can bring to customers, employees and suppliers and communicate these benefits clearly to these key stakeholders. 8. Take nothing for granted. Finally, employees of family businesses, especially those with long service, can sometimes take for granted the additional monetary and non-monetary benefits that your family business culture provides. Ensure you send out annual employee benefits statements detailing all the benefits that you provide to help build engagement, loyalty and employee retention.

Surprisingly, many private company boards pay little attention to perhaps their most important function, maximizing realized shareholder value. Despite their legal and fiduciary responsibility to exercise this function, boards often fail to give it much attention. My experience from serving on 14 different boards is that this issue is seldom even on the agenda! Private company boards typically review business and financial plans and budgets, challenge business strategies, discuss organizational issues, and approve major transactions such as loans, acquisitions, or the sale of the business. They rarely challenge management to look at shareholders’ equity as an investment, much as a wealth manager might do. Too often, the board looks at the business solely as the “operating entity” versus the shareholders’ “investment.” As a result, boards do not apply traditional investment management principles in their oversight role and miss the important board responsibility of protecting the interests of the shareholders. The common error is confusing business wealth creation with shareholder wealth “realization.” They are not the same; at times, not even close. We have witnessed too many businesses lose a lifetime of wealth creation, often due to no fault of their own. The Great Recession of 2008 is one recent example. Many businesses and, correspondingly, shareholders, will never get their values back to pre-2008 levels. Even if they do, when considering the time value of money, these shareholders have lost considerable wealth. Inevitable Consequence When I was the CEO of my family’s businesses, we focused on the “company” return on equity (ROE). Under that metric, we were very successful, posting double-digit returns for several consecutive years, much to the satisfaction of our board and shareholders. However, we failed to recognize the significance between “realized” and “unrealized” shareholder ROE. So do most business boards. Shareholder ROE is not realized until cash is in the shareholders’ pocket. Prior to that, it is an “unrealized stock gain” with all of the associated risks. Many boards, by “failing to act” (another prime board responsibility), have their shareholders exposed to unrecognized “tail” risks, lower ROEs, and less liquidity than alternatives discussed below. The inevitable consequence is the silent and un seen evaporation of shareholder wealth, often over a single generation. To address this issue, boards need to evaluate how to realize business wealth — prior to the sale of the business or other future liquidity event. When they do, they will serve their shareholders by: Improving overall shareholder investment performance by increasing realized internal rates of return and decreasing exposures to tail risks. Providing liquidity to the shareholders; even to the extent of providing an alternative to needing to sell a business for liquidity needs. Introducing better financial management disciplines into managing the business, similar to private equity investment firms. Implementing A Strategy For Wealth Realization The first step is to evaluate the business’s future cash flow generation capability, sustainability and volatility along with its capital needs. In-depth company and industry knowledge supported with a professional and objective operational and financial review of the business is essential. The goal is to determine the amount of free cash flow that can be expected over the next three to five years. The next step is to evaluate alternative business capital structures and shareholder distribution strategies. The goal is to meet the current and future capital requirements of the business while protecting and realizing previously created shareholder equity through one-time or recurring shareholder distributions. Private company boards need to evaluate how to realize business wealth — Prior to the sale of the business or other future liquidity event. A variety of options should be evaluated, such as recapitalizing the business through debt or sale-leaseback transactions; spinning off non-core assets (such as real estate) into separate companies; selling underutilized assets and outsourcing; improving working capital management; and improving business operations to generate increased cash flow. In the final step, alternative business scenarios, financial management practices, capital structures, and shareholder distribution strategies need to be developed. Next, financial models need to be created to evaluate each scenario to determine which plan will best support the business while maximizing realized shareholder returns. A large cushion of conservatism is always recommended. In certain instances, we have suggested transferring distributions into a special purpose entity with the same ownership group. This provides a separate standby LLC to support the main operating business in case funds are needed, loans need to be guaranteed, or asset protection strategies separate from the operating business are important. Common Objections Some business CEOs state, “I am comfortable being invested in my business, where I understand the risks. I also do not like to incur debt for the company.” Many boards do not challenge CEOs on these preferences since they appear to be a lower-risk approach to managing the business. On a superficial level, that response appears to have merit, but an analysis with real company data often proves the opposite. Boards and CEOs often fail to account for uncontrollable and unpredictable tail risks that might occur, such as: Major customer, supplier or key employee loss. Product or service obsolescence. Governmental regulatory or product liability problems. Shareholder feuds/litigation. Business interruptions due to uncontrollable events. Declining future business performance. Market changes in interest rates, equity multiples or tax rates that negatively impact shareholder value. Remember, if cash is not distributed to share holders, then their internal rate of return is zero, even if the business returns look great on paper. While we do not recommend highly leveraged companies, many businesses similar to my family business had no debt in its capital structure. Of course, in the short term, companies with lower debt have lower financial risks. Over the longer term, boards must consider the significant risks and costs associated with that strategy. One sim ple example of the cost of a no debt strategy is with working capital management. With no debt, the board is using shareholders’ equity capital to finance accounts receivable and inventories. In today’s marketplace, working capital lines from a bank are costing around 3%. As a result of self-funding, the board is making an unconscious decision to invest shareholder equity capital into a 3% returning asset, a good example of wealth evaporation over time. Client Case Study In a recent client case, we projected two different scenarios for a growing manufacturing company. In the first scenario, the company used annual operating cash flow to provide capital for growth prior to borrowing additional funds; shareholder distributions were made beginning in year 5 after all debt was paid off. In the second scenario, operating cash flows were distributed annually beginning in the first year to the shareholders; capital for growth was provided through additional bank debt. Both businesses were projected to be sold for the same enterprise value in year 10. The results between the first and second scenarios were significant: Scenario II was far superior to Scenario I on all metrics, including: Shareholder-realized ROEs increased from 13.3% to 19.1% due to the timing of cash distribution. Shareholder liquidity and realization of their equity values through cash distributions increased from $22 million to $83 million during the nine years prior to the sale. Cumulative shareholder wealth “realized” through year 9 increased from 14% to 52% of total shareholder proceeds received over the 10 years; half of the value of the company was received by the shareholder group without selling the company! Maximum debt to EBITDA ratio was well controlled in both scenarios, increasing from 0 to 2.5 times. Remember, if cash is not distributed to shareholders, then their internal rate of return is zero, even if the business returns look great on paper. By focusing on shareholder value realization strategies, your board can develop alternative strategies that will significantly increase the value shareholders receive from their investment, even without improving operating results. The Fundamental Question Every business board needs to consider this fundamental question: How many years do you wait to begin partially realizing shareholder wealth? Some should immediately begin realizing the wealth and others such as high-growth companies need to retain their capital for a period prior to harvesting some of the created wealth. It is a question too many private company boards are not asking, resulting in too many shareholder groups not being well served.

There is a point in many growing businesses when something subtle changes. It is not always dramatic and it is rarely announced. It might show up late in the day, when a founder realises they are still carrying a decision they thought had been dealt with, or it may surface in a meeting when a question is asked and no one quite owns the answer. What often follows is the same conclusion: the business needs someone senior from outside. On paper, that feels logical and sensible. In practice, it is rarely straightforward. In family and founder-led businesses, senior appointments are not just commercial decisions. They influence how authority works, how trust is built, and how the future of the business feels. Who you bring into the inner circle shapes not only what the business does next, but how it behaves as it grows, which is why these appointments tend to carry more weight than they appear to at first glance. In family businesses, senior appointments change the balance of trust as much as the balance of skills. Family and founder-led businesses are not smaller versions of corporates. They are shaped by history, relationships and long-standing ways of working, with authority often sitting in people rather than roles. Much of what makes the business function day to day has never been written down, because it has lived in the founder’s judgement for years. As a result, senior hires do not arrive into a blank canvas. They step into a story already in motion. In larger organisations, roles are clearer and authority is more explicit. In owner-led businesses, much of that clarity exists only in people’s heads. This is often where candidates who look strong on paper can struggle, as they may expect authority that has never been consciously handed over, or clarity that has never been articulated because it was never previously required. This is not a weakness. Continuity is one of the great strengths of family businesses. It does, however, mean that senior appointments need to be approached differently. When an external hire does not work out, the visible costs are relatively easy to calculate. Fees, salary and time lost all show up quickly. The real cost tends to sit elsewhere, usually emerging more slowly. Momentum begins to stall, decisions are delayed, and founders often step back in, reinforcing a quiet belief that outsiders do not really work here. Confidence drains from capable people, boards become more cautious, and conversations that once felt open start to close down. In family businesses, failed appointments can also leave marks between generations. One family member may have supported the hire, while another quietly doubted it. When it does not work out, that doubt often hardens into something more lasting and becomes harder to revisit openly. Most owners underestimate not the cost of failure, but how long it takes the business to recover from it. Timing is often the hidden issue behind these outcomes. One of the hardest questions for founders is not who to hire, but when to do it. Hire too early and a senior leader arrives into a business that has not yet developed the rhythm or discipline to support them. Much of their time is spent firefighting and filling gaps, and frustration gradually builds on both sides. Over time, the business often concludes they were too corporate or not hands-on enough, when in reality the organisation was not ready. Hire too late and the opposite tends to happen. The founder is already stretched, the team is operating at capacity, and important decisions are being deferred because there is no space to deal with them properly. The hire arrives into exhaustion, where expectations are high and patience is thin from the outset. In both cases, the appointment struggles. The issue is rarely size or turnover. It is readiness. Readiness is not only operational, it is also relational. A new CEO will not resolve unresolved family tensions, clarify decisions the owners themselves have not aligned on, or fix authority that has never been properly agreed. In fact, senior hires often surface these issues rather than smoothing them over, because accountability is suddenly tested rather than assumed. Growth can easily mask a lack of readiness. Revenue may be rising, but inside the business the founder may already be compensating for gaps and carrying far more than they realise. In these situations, recruitment is often treated as a form of relief, a way of buying back time. In reality, senior appointments demand attention, conversation and energy. The business has to make room for them, not just structurally, but emotionally. Even thoughtful and experienced owners tend to fall into a few common traps. One is hiring a version of themselves. Someone familiar, easy to trust and quick to settle in. It feels safe, but comfort is often hired at the point where contrast was actually needed. At the other end is the over-corporate hire, with strong credentials, established systems and clear processes. They bring order and discipline, but can struggle in environments shaped by informal authority and long-standing relationships. The business becomes more professional, but often at the cost of energy and pace. Then there is the undefined role, where recruitment begins before there is real clarity about what needs to change. Authority is unclear, boundaries blur, and frustration builds quietly on all sides. Each of these reflects the same underlying issue: the business has not yet agreed what it is trying to become. Fit at senior level is often described as instinct. That instinct matters, but it is rarely enough on its own. Fit is about more than chemistry. It is about fit for the role, fit with the people, fit for the stage the business is in, and fit for where it is heading. How someone behaves under pressure often matters far more than how they perform when things are comfortable. We have seen capable leaders struggle not because they lacked skill, but because they could not adapt to how decisions were made or how authority actually worked. Neither side was wrong. The fit simply was not right. Many appointments fail not because the hire is wrong, but because the business around them has not changed. For founders, bringing in senior leadership requires a shift from doing to leading, and from being central to every decision to holding direction. For many, the business is where they feel most competent and most in control, so stepping back can carry a quiet sense of loss. Successful appointments depend as much on what the founder is ready to let go of as on what the new leader can take on. When this is not acknowledged, it often shows up elsewhere. Decisions are revisited, authority softens, and progress slows. What began as a hopeful step forward gradually becomes a quiet stalemate. Senior appointments are not transactions. They are moments that deserve the same depth of thought as any major investment or strategic shift. The most useful questions are often the uncomfortable ones. What actually needs to change? What am I holding onto that I will need to release? What is this role really here to do? Most founders will make only a handful of defining leadership appointments in their lifetime. How they approach those moments shapes far more than a role or a title. It shapes what the business becomes when it is no longer only theirs.

There is a moment many families in business recognise, even if they have never talked about it openly. It often comes well before any formal conversation about succession, usually around a decision or a difficult conversation when responsibility starts to feel personal rather than shared. Not because the next generation lacks ability or commitment. Most don’t. They usually care deeply about the business and what it stands for. But something more fundamental is being tested. Growing up around a family business does shape you. You pick up the language, the habits, the way things are done. You see how pressure shows up, how decisions get made, and how work and family life blur into one another. Over time, that creates familiarity and confidence. It gives you a sense of belonging. What it does not automatically give you is readiness for the top job. CEO readiness is not inherited. It is formed. In many families, there is an easy assumption that being close to the business means being prepared for it. The child has always been involved. They understand the context. They know the people. Surely that counts for something. It does. Just not always in the way people expect. The difference usually comes down to where responsibility has really sat. There is a big step between contributing to decisions and being the one who carries them. Having a view in the room is different from being the person others look to when things go wrong. Supporting a decision is not the same as standing behind it when it upsets people or doesn’t work out. From the outside, leadership can look confident and decisive. From the inside, it often feels uncertain and exposed. You are required to make calls before you feel completely ready, with incomplete information, and live with the consequences. That kind of judgement only comes from doing the job, not watching it. When that gap is overlooked, pressure shows up early. Expectations rise quickly. Confidence can wobble. Teams start to test authority, often without meaning to. Family relationships that once felt straightforward become more complicated once business decisions sit between them. This is rarely about capability. It is usually about timing. Families who handle this well tend to be deliberate about how readiness is built. The rising generation is given real responsibility early on, long before titles are discussed. They are stretched, challenged, and allowed to get things wrong while the cost is still manageable. Over time, they build judgement and credibility, not just experience. Often, part of that learning happens outside the family business. Not because it looks good on a CV, but because it removes the safety net. Outside the family context, you have to earn trust. You don’t get the benefit of the family name. You find out quickly how you show up when no one is obliged to give you time or patience. Inside the family business, authority can arrive too easily. Outside it, authority has to be earned. When this groundwork is done properly, progression feels natural. Responsibility grows before formal power. People begin to look to the individual instinctively, not because of their surname, but because they trust their judgement. By the time succession is discussed openly, the answer already feels clear. When it isn’t, expectation often arrives first. Titles are given before confidence is fully formed. Responsibility lands before the individual has had the chance to grow into it. The role feels heavier than expected, not because the person isn’t capable, but because they are still finding their feet. This is where the founder’s role becomes particularly important. For many founders, the business is not just work. It is where they have proven themselves, where they feel most useful and most in control. Stepping back is not simply a governance decision. It is an emotional change. When readiness hasn’t been built carefully, founders often find themselves staying closer than intended. They step in. They double-check. They revisit decisions that were meant to sit elsewhere. Not out of mistrust, but out of habit and responsibility. Over time, that creates tension. The next generation feels constrained. The founder feels uneasy. The wider business senses that authority is blurred, even if no one quite says it. Family trust and leadership readiness are often confused. Trust comes from relationship and history. Readiness comes from experience, judgement and confidence under pressure. One does not guarantee the other. The strongest families understand this early. They separate love from leadership. They recognise that asking someone to earn a role is not a lack of belief, but a sign of respect for the role itself. Being ready to lead is not just about technical competence. It is about how someone behaves when decisions are uncomfortable, when trade-offs disappoint people, and when there is no perfect answer. It is about resilience, self-awareness and the ability to hold authority without either shrinking away from it or clinging too tightly to it. These qualities take time. Readiness is built through consequence, not conversation. That is why succession works best when it is treated as a process, not a moment. Responsibility is handed over in stages. Authority is tested and reinforced. Difficult conversations happen early, before pressure forces them. Both generations are given space to adjust, and the business has time to adapt. Being the founder’s child can open the door. It brings opportunity, access and insight that others don’t have. But walking through that door, and staying there with confidence, requires preparation that goes well beyond growing up around the business. When that preparation is taken seriously, succession becomes a strength. When it isn’t, the business rarely fails dramatically. It simply slows, weighed down by expectations that arrived before readiness did.

At some point, every successful family business reaches a crossroads. Growth demands new skills. Complexity requires new experience. And the realization sets in that not every leadership role can, or should, be filled by a family member. Hiring non-family members is not a sign of failure in a family business. It’s a sign of maturity. When done well, it strengthens the organization, accelerates performance, and protects the family’s legacy. When done poorly, it creates confusion, mistrust, and costly turnover. The difference is clarity—and respect. Start With Role Clarity, Not The Résumé One of the most common mistakes family businesses make when hiring non-family leaders is recruiting around people instead of roles. Before beginning any search, families must be clear about: What success looks like in the role What authority comes with the role How the role fits within family and business governance Non-family leaders struggle when expectations are ambiguous, or change based on family dynamics. Clarity protects both the business and the hire. Separate Family Issues From Business Decisions Non-family leaders join a business to lead, not to navigate unresolved family conflict. Hiring succeeds when: Family governance is defined Decision-making authority is respected Family disagreements are not played out in management meetings When non-family members are placed in the middle of family tension, they lose credibility before they have a chance to succeed. Strong governance creates a professional environment where non-family talent can perform at their best. Be Explicit About Power and Decision Rights One of the fastest ways to lose a strong non-family leader is to give them responsibility without authority. Before hiring, clarify: Who makes the final decisions How disagreements will be resolved When family input is advisory versus directive Transparency builds trust. Surprises destroy it. Hire For Cultural Fit - And Emotional Intelligence Technical competence gets candidates in the door. Emotional intelligence keeps them there. In a multi-generational family business, successful non-family leaders understand: The family values that represent the foundation the business should operate from The importance of legacy The weight of family history The need for respect across generations Cultural fit does not mean avoiding challenge. It means challenging with respect. Create A Fair And Consistent Evaluation Process Nothing undermines morale faster than the perception that family members play by different rules. Best practices for hiring and retaining non-family members include: Clear performance metrics Regular feedback Consistent accountability Respect is demonstrated through fairness. When non-family leaders see that standards apply equally, trust grows. Position Non-Family Leaders For Success Early The first 90 days matter more in a family business than in almost any other environment. Set new hires up for success by: Clearly introducing governance structures Defining how family members interact with management Providing access to decision-makers, not just messengers Early clarity prevents long-term frustration. Understand the Strategic Role Of Non-Family Talent Non-family leaders are not threats to family legacy. They are stewards of it. In strong family businesses, non-family executives: Professionalize systems Develop future family leaders Provide objective perspectives They bring experience that complements—not competes with—family ownership. Respect Retains Talent The most common reason non-family leaders leave family businesses is not compensation. It is lack of respect. Respect shows up as: Being listened to Being trusted to lead Being supported in front of others When respect is present, loyalty follows. Hiring Non-Family Members Is A Leadership Decision Hiring non-family members is not about replacing family. It is about strengthening the enterprise so the family can continue together—across generations. The most successful family businesses understand that you don’t protect legacy by limiting talent. You protect legacy by surrounding it with the right people and appropriate governance structures.