Sustainability is an age-old problem for businesses of all shapes and sizes across the entrepreneurial landscape. Measuring the success of non-family businesses is typically generational, whereas the judgement on family businesses is over a longer timeframe with sustainability analysed over decades. Considering that one job in three within the UK is family business-based (IFB 2008), an understanding of the phenomenon which leads to the vast majority of family businesses failing to progress to the second generation and even fewer to the third is essential. In short, why do so few family businesses succeed at sustainability with only 1 in 10 surviving to the third generation (BERR). The ability of the family business to disseminate the tacit and explicit knowledge required to deliver competitive advantage is at the heart of the successful succession. The central drive for sustainability, coupled with familial ownership and management, delivers a unique identity. The stakeholders of the succession process are the family, the founder, the successors and the advisers. Each can be a significant reason for success and equally the cause of failure. The article will continue by discussing these areas along with conflict which acts as a further primary cause of the family business breakdown. The Successors’ Role Lost tacit knowledge and the inappropriate replication of old decisions can lead to poor quality successors and an inability to deliver the same added value as the previous generation. Encouraging the potential successor to gain external commercial experience and either quality educational or practical expertise will provide the tools to aid independent decision making. It is important that this encouragement does not lead to a stifling sense of pre-destiny but provides the opportunity to develop ideas and independence. The Role Of The Founder The majority of founders refuse to discuss succession plans and continually change retirement plans and dates, aiming for an individual sustainability. The perception of indispensability becomes endemic and represses the next generation; so firm plans are needed to avoid the ‘just five more years’ sentiment. The overall strategy for the founder will include addressing their financial, business, family and psychological concerns amidst a backdrop of a strong board and an established peer network to enhance the succession potential. The founder can further play a part by helping to develop a robust family business culture that will endure without their central leadership. Areas Of Conflict And Resolution Conflict can greatly affect the chances of developing a sustainable family business through the generations. Typical conflict issues include the capacity and capability of the successor, family issues that directly affect the business, poor communication, and non-executive shareholder issues. Non-executive family shareholders are those individuals or groups that hold an ownership stake but are not part of the day-to-day running of the business. Arguments typically develop around the direction of the business, the dividend policies, the executive remuneration policy, the succession policies and other family employment rules. The implementation of a family charter and family council can go some way to addressing these associated issues and can give a formal feedback channel to address emergent and long-term issues that the family members face with the help of advisers. The Role Of Advisers Trusted, knowledgeable and experienced advisers can deliver detailed input to the succession strategy via skills audits, family charters, forecasts and business plans or they may simply act as a sounding board throughout the process. Family Matters Integral to succession success are the actions of the family. The introduction of the family charter can aid the long-term reduction of conflict. Included in the charter would be a set of rules on the entry and exit of family members to the business, capital rights of each participant, the salary and bonus structure enjoyed by the members, and a route for mediation resolution. Evidently, the facets of the family business problem are inter-related, no more so than the connections between founder and successor which exist in adult-child and founder-successor forms. This creates tensions and blurred bonds that will often drive the ultimate outcomes and sustainability. It is important that the relationship becomes an adult-to-adult rather than adult-to-child during the antecedent phase of the succession process. This will create the change dynamic and aid the removal of ambivalence via a combined professional-emotional bond. Bringing together the pertinent complex issues and strategising as a whole leads to enhanced opportunities for the sustainability of a key part of the global economy; family business. Of Course It Matters… This article began by asking whether sustainability in family business matters before moving onto a strategy for improving the success rate. Maybe there is space for an alternative view of family business sustainability that takes a step back from the prescribed wisdom. It may be worth considering that a large number of family businesses only ever intend to ‘survive’ for one generation; the available figures for survival rates do not examine the thousands of businesses that provide funds and resources to the next generation and their successors to continue entrepreneurial endeavours outside of the banner of the initial family business. The ‘failure’ rates may be hiding a sustainable business family ethic developed from within the initial family business too. About the Author - Richard Alun Jones, Commercial Finance Director who can be contacted on rjones@accural.co.uk

When it comes to family business, one of the biggest challenges they face in the near full employment economy in which they operate is the recruitment and retention of staff. The culture of any organisation determines many things and can have a real bearing on the staffing conundrum. Our recent attendance at the Institute for Family Business national conference clarified the cultural impact on family firms even further. The next generation of employees, current graduates and school leavers have very different career objectives to many of their predecessors, whether it is in regard to working hours, ways of working, working practices or simply looking for a role with a purpose. Professor Veronica Hope Hailey from the University of Bath was clear that the right approach that is already adopted by many of the 5 million family firms across the UK today with regards purpose and values should stand them in good stead, and make the 21st century, THE century for family firms. Purpose and values serve much more than simply words. They help to define the culture of a business, a way of working and a real set of values that should permeate the entire workforce, creating a unique environment to work and service the needs of customers. The culture is also shaped by the leadership of the business, often over generations with different generations helping to shape the business for subsequent generations too. Over time, different family firms will inevitably create a culture of inter-generational collaboration, something that can take various forms, not least at an extreme level the destruction of the history wall, only for two generations to then work together to rebuild it with a better impact as the end result! Culture needs to be worked for, values lived and breathed, with leadership demonstrating the values to which they subscribe each and every day. Creation of successful family business culture and good governance through the existence of a successful board culture is also important, and in this regard the roles of both family and non-family members are key. Obviously, with the wrong people on the board and the wrong chair in place, family or non family, can lead to the creation of an unsuccessful culture that can create all sorts of challenges going forward. Culture is not only defined by a set of values but also the history and heritage of the organisation, something that is clearly apparent in long standing, multi-generation family businesses. Younger family firms also have their own culture too. However, over time, it is inevitable that the roles and impact of previous generations on the culture of the family firm becomes more apparent, the stories and anecdotes from previous generations playing their part, as does the fact that in many of these businesses multiple generations of families have worked for the businesses too, creating a unique mix of pride, determination and passion to continue. Never under-estimate the power of culture within the context of the family business. It can be a truly powerful force and a clear point of difference in a competitive market place, adding real value to the business and the relationships with stakeholders and helping in the battle to attract, recruit and retain the workforce for the next generation too. About the Author - Ben Fowler is the Managing Director of Western Pension Solutions , a specialist pension consultancy that provides strategic advice to family businesses for managing their legacy defined benefit pension schemes. Following their success in managing the Vestey pension scheme, they were founded by Ben Fowler and the Vestey family with the clear purpose of helping other families solve their pension issues in ways that are fully aligned with their objectives as business owners. All their client relationships are led by people experienced in understanding how the complex dynamics of family, business and ownership translate into an effective pension strategy.

Are management buy-outs a means of ensuring viable futures for established family businesses? Selling or handing over the family business will be one of the most difficult decisions a family will make and many different alternatives will have been explored. Neil Orford explains more. More often than not, management and employees hold the key. Their loyalty, commitment and knowledge of the core values of the business mean that they can become the natural choice as successors. The climate has never been better for the management team to take up the once in a lifetime opportunity of acquiring ownership of the business from its shareholders – the cost of finance is relatively low, venture capitalists have money burning holes in their pockets and company values remain at sensible levels. A Management Buy-Out (‘MBO’) works well for the vendors too. Vendors can test the feasibility of the buy-out before presenting the opportunity to management and they can sleep comfortably in the knowledge that their business will not be subjected to the commercially sensitive scrutiny of a trade buyer. There are a number of advantages and disadvantages associated with MBO’s and careful consideration needs to be given to these prior to proceeding down the route of one. Advantages of an MBO Management work in the business and therefore have an understanding of the operation and can make the MBO process easier Significantly reduced due diligence requirements Potentially reduced warranties and indemnities, reducing comeback against the vendor Some businesses/market sectors do not lend themselves to trade sales and therefore an MBO can be a way of exiting successfully. Disadvantages of an MBO Failure to complete an MBO can ultimately make the management’s position untenable Consideration received for a business by a vendor is typically discounted compared to what can be obtained when selling the company on the open market MBO’s often include some form of deferred consideration, which may not meet the immediate cash expectations of the vendor. The first concern of many managers who are given the opportunity to participate in a buy-out is ‘how much will I need to invest personally?’ In most buy-outs, the bulk of the finance required to fund the acquisition is provided by banks, asset funders, venture capitalists or the vendors. An investment from the management team is helpful in securing the funds required, not because of the size of the investment, but more importantly for external funders it demonstrates the commitment of the management team to the buyout. The buy-out process can be complex and the management team will have to accept that the financial gearing in the business, due to the external investment, will be higher and any funders will keep a close eye on progress. But if the management team are confident in their ability to deliver the plan and grow the business then their financial reward can be significant.

Established by Sir William Hastings in the late 1960’s, Hastings Hotels is a family-owned company and the largest independent hotel group in Northern Ireland. Legacy is important to them. Very much a family business, all four of Sir William’s children joined the group and are now in the roles of Managing Director, Sales Director, Marketing Director and Events Director. Although it has not been all plain sailing over the last 50 years for Hastings Hotels, Howard Hastings, Managing Director of the group, shares how their purpose and values have helped the company grow from strength to strength, including their latest landmark addition, the Grand Central Hotel in Belfast. “We’ve always seen the need to participate and develop relationships that speak more to the family values than to the financial return,” explains Howard Hastings, Managing Director of the Hastings Hotels Group. Howard Hastings and his sisters learned their craft from their father, as Howard recalls. “He grew the business from pubs into hotels and was strongly guided by his business outlook which he learned from his father and brother. Often he would share those lessons with my sisters and I, so we grew up learning it too. We are fortunate to have such a clear sense of values which include not only a work ethic but reflect the morals of the company too. For us it is vital that the business equally respects fellow family members as well as our staff, suppliers and clients.” Hastings Hotels is a source of pride to many in Northern Ireland. Commitment to their region is part of who they are and brings its own rewards, Howard explains. “We feel very much that we are a full-service professional hospitality company, based and grounded in Northern Ireland and it’s the last that dictates our social corporate responsibility. We work with local suppliers and use local produce because it makes good business sense. We are not concerned to pay more for local produce, because it’s more than made up for in the stories that we tell about where that produce comes from, and that in turn allows us to get a premium in the marketplace.” Their contribution goes far beyond sourcing goods, as Howard points out. “My father was a staunch supporter of several causes down the years, but only those in which he felt he could add value by immersing himself in what they did. We support locally-based causes because of that ability to add value to something that’s going on. We’ve also always had a participative view of working in our community, joining governance bodies like Tourism Ireland, Tourism Northern Ireland, and Visit Belfast, as well as representing our sector in the wider business like the Institute of Directors. We believe it is important to the business and the sector, and we also develop strong links with colleges including Belfast Metropolitan and universities like Ulster University, which are a source of potential recruits for us.” Into Dad’s business Asked about attracting the next generation to the family business, Howard believes the challenge for a regionally-based service sector family business is delivering local services, and to be sufficiently attractive that the next generation wants to participate. “Being global citizens they want to travel more and gain their own skill sets. The best part is they aren’t necessarily what we think they are or what our generation thinks they are.” He looks to the impact this will deliver in the future: “Today’s generation have a range of opportunity for learning and experience open to them, that will enable them to bring a greater range of skill sets to the business.” “One of the things that manages to ensure a sense of purpose, and keep the peace, is that each of the family members is very fulfilled in their individual role.” Investing in people Howard also believes it is important to look beyond the family, “We’ve a long history of wanting to give opportunities to new entrants to train and develop with us. That may not be widely shared with all parts of our industry, but it’s becoming increasingly recognised as an important benefit of working with our company. That’s good because it’s a reputation that takes a long time to establish. I believe the retention level of our staff is important, in an industry where that’s traditionally an issue; and by offering employment to people of all skill levels, as well as opportunities to grow and develop within the company, we enjoy strong retention. The company is big enough that the extent of family membership participation is not the same barrier to progress for non-family members that it might be in a much smaller organisation.” It’s clear that Howard and his sisters inherited a strong sense of purpose from their father to grow their prestigious hotels group in Northern Ireland, supporting local suppliers and the tourism industry. This has not limited their horizons. If anything the transformation of landmark hotels like the Grand Central have helped grow the region’s profile overseas, helping to attract more international spend. All good business sense. This article was first published by PwC as part of their Family Business Survey. It has been reproduced with their permission. Visit their website here to find out more.

The post-COVID bounce back in M&A deals has led a lot of entrepreneurs to consider selling their businesses. Business owners are aware that today’s extremely healthy M&A market will not continue indefinitely and that the window of opportunity will soon begin to close. This paper looks at the most common legal pitfalls encountered by entrepreneurs selling their businesses, as seen by the Corporate and Private Wealth teams at Forsters . These teams have decades of experience in advising entrepreneurs on business exits. They know the steps every entrepreneur needs to take to get a business in the best legal shape for an exit, as well as what they need to do to manage the tax bill on their gains and maximise the wealth they secure for their families. Get your business paperwork in order – bidders worry they will be buying problems. A business with its paperwork in order reassures potential bidders – they will see it as lower-risk and more likely to result in a quick, clean transaction. The Corporate team at Forsters often advises entrepreneurs on how best to clean up their paperwork and make their businesses as attractive as possible. The biggest issues they see most often are: 1 - Renegotiate business debts if necessary – don’t leave it to the buyer Not having long-term control over the cost of debt of a target business can be an issue that puts off potential acquirers. Any loan renegotiations that need to take place should be concluded before you open the business’s books to a bidder. Failing to deal with the problem risks them walking away or lowering their bid. 2 - Extend the business’s property leases if they are running out – it makes the business more attractive to an acquirer A potential acquirer will likely be uncomfortable if a lease on a key property used by the business – an office, factory or retail site – is coming up for renewal shortly after the purchase. Having certainty over future costs is valuable, as is avoiding the disruption of relocating the business. It is well worth getting renegotiations with landlords underway a year ahead of your projected exit point. 3 - Formalise any ‘gentlemen’s agreements’ with staff, suppliers and customers Another common issue that acquirers dislike is if a business has failed to formalise the agreements it has with its key staff, suppliers and customers. Far too many businesses still operate on long-forgotten ‘gentlemen’s agreements’ with key staff. Senior team members who have been with the business for many years may not have formal contracts in place, creating a risk that they could quickly walk away from the business following an acquisition. Bidders will want to see that senior staff are contractually incentivised to stay with the business for at least 12 months and have oversight of the costs, including their pensions, bonuses, profit shares and any other remuneration. The same goes for contracts with important customers – it is common to find formal arrangements that expired long ago and have continued on an informal basis. This creates the potential for key clients to be lost without notice periods, impacting turnover without warning. This risk can impact a valuation or a bidder’s willingness to move forward with a purchase. If this is the case in your business, rectify it before starting the sale process. 4 - Update the shareholder register to avoid costly disputes Another common issue, especially for startups in industries like technology, is the granting of equity to key staff. While this can be an excellent way to retain important contributors to business growth, if it is done informally and the shareholder register is not properly updated, it can trigger costly and avoidable disputes. If these informal grants of equity were made several years earlier, recollections of the details often differ between the parties and misunderstandings can become litigation when an offer is made for the business. Sit down with those key staff members as early as possible, formalise their stake in the business and update the shareholder register. 5 - Make sure any IP the business holds is protected by patents and trademarks More and more businesses are seeing the value of the intellectual property they hold make up a significant percentage of their valuation, but this IP only has real value if it is protected by patents and trademarks. Entrepreneurs have seen potential bidders walk away from negotiations after finding that IP the business relies upon is not protected, risking devaluing their investment in the future. Taking advice from an intellectual property lawyer is vitally important if your business has proprietary systems or owns market-facing brands that form part of its value. 6 - Deal with any difficult ‘legacy issues’ the business has Bidders are always on the lookout for anything they might deem to be ‘skeletons in the closet’ for a business. During a business’s early years, entrepreneurs often file issues away under ‘to be dealt with later’. The Corporate team at Forsters say examples of this kind of issue that entrepreneurs may have to deal with before they try to sell their businesses include: 7 - Ensure the business used furlough properly – and deal with it if there are any problems In the early days of the pandemic, there was plenty of confusion around the furlough scheme and a lot of businesses made claims that later turned out to be in error. HMRC is now hunting down businesses that owe money because of incorrect furlough claims. It is far better to deal with these issues proactively rather than waiting in hope that HMRC misses it. There are likely to be significant penalties for businesses that made claims HMRC deems to have been ‘fraudulent’ and there will be little sympathy for those who did not come forward to report it voluntarily. Acquirers will not be keen to purchase a business with a risk of this kind. 8 - Unwind any ‘problematic’ transactions from the company’s history It’s not particularly unusual for businesses to have long-buried compliance issues dating back to their early days as a start-up. When the books are turned over to a potential bidder, those issues have a tendency to come back to the surface. If, for example, a director purchased a car for personal use through the business, it can be a significant red flag to an acquirer that there are other governance problems. Any business owner with issues of this kind would be well advised to unwind any of these transactions before they put an M&A deal at risk. 9 - Prepare your heirs inheritance by getting your taxes in order A key driver for many entrepreneurs to build a business in the first place is the desire to provide wealth and comfort to their families. A key part of being able to do this successfully is to prepare your personal tax situation to maximise your gains – and by extension, their gains – from selling your business. The Private Wealth team at Forsters say that the two big issues for entrepreneurs to be aware of here are: 1 - Don’t gift your children cash from the sale – you may overpay tax, and you will miss the chance to protect the money (e.g. from divorce) It is common for entrepreneurs to want to pass on some of the capital generated by the sale of a business to their children. Taking advice on the most tax-efficient way to do this is important. Completing the sale then gifting your children cash is rarely the best way. Capital Gains Tax savings can be made if shares are given to children before the sale. Also, shares in a business typically qualify for Business Property Relief (BPR) from inheritance tax, which means that before the sale there is a unique opportunity to transfer assets into trust for the children. After the sale, a gift of cash into trust would suffer an immediate 20% inheritance tax charge. Having assets in trust can ensure that the children receive benefits only as and when they are ready, and can provide protection on divorce. An outright gift of cash offers no such protection. 2 - Be careful about leaving too much cash in the business – your heirs will end up paying too much IHT As mentioned, one of the key tax reliefs available for entrepreneurs passing on shares to their children is Business Property Relief (BPR). But if there is too much cash in the business, the relief may be limited. Make sure there is a solid rationale for the business holding cash, such as a planned programme of capital investment. Ensure this is documented and that your heirs stick to the plan. Think about how to manage your own capital gains tax bill Capital Gains Tax can act as a significant deterrent to entrepreneurialism. Even the Government recognises this, having put in place tax reliefs like Business Asset Disposal Relief (formerly Entrepreneurs Relief) to encourage investment in business growth. The Private Wealth team at Forsters say that this relief is not the only way for entrepreneurs to reduce their CGT bills when they exit a business. Planning to move abroad after selling your business? Consider doing it before that to reduce your CGT bill. Many entrepreneurs plan a relaxing retirement overseas once they have exited their business. However, few consider the possibility of moving overseas before the sale of their business, which can offer significant tax advantages. If you become resident outside the UK for tax purposes for six years, you may not be liable to UK CGT on the sale of your business during that time. If it works for your personal circumstances, it may be worth accelerating your permanent move out of the UK to save yourself what is likely to be a very substantial tax bill. Becoming a serial entrepreneur? Business Asset Rollover Relief can defer your CGT bill while you grow your wealth. Business Asset Rollover Relief (BARR) allows an entrepreneur to defer the payment of a CGT bill by investing their capital gain into a new business. The CGT bill from the first business sale doesn’t become payable until the second business is sold. That can be very powerful – if your second business is successful, your personal wealth may make the CGT bill from the first business relatively insignificant. Final thoughts... For an entrepreneur, making the most of the post-COVID bounce back in the M&A market is possible so long as you take the right advice. Just as when building the business in the first place, preparation is important. Your business didn’t become successful by chance – it became successful through careful planning and wise decision making. Apply the same approach to your exit and you give yourself the best chance of a smooth transaction and an optimal price. This article is available to download or print as a pdf below:

Photographs capture events, landscapes, and individuals. Each photograph is a framed picture composed by the photographer, they freeze time, emotions, and narratives. Here we are taking a look at the elasticity of family legacies and the gravity of family narratives. How would you like to be remembered? Grasping the Family Essence Multigenerational family legacies and family stories are usually captured by historians and archivists, who meticulously unearth the various historical aspects, even long-hidden truths, about family members, branches. Some even cover business milestones, and make historical connection points that marvel and bring key insights to the commissioning business families. However, their capacities and capabilities in creating a well-rounded picture of the family essence are very much limited on many levels. Firstly, they do not bring in the layered business, geopolitical, emotional, intellectual, social, cultural, imaginative, inspirational, aspirational, talent-related, values and purpose-based aspects. Neither can they fuse all these strongly intertwined facets and nor do they propose to form key narratives that are critical to anchor families and their legacies. Most importantly, they can’t bring the family together around a recollection of catalogued books and historic data and keep them engaged for long. In addition, they don’t have the ability to frame and continuously reframe the family narratives with the change of time due to lack of family insights, as usually they work alone with limited access to, let alone co-creating with the commissioner family. Hence, they mostly rely on the data that they discover and uncover. They might even unwillingly add their own bias and assumptions to the findings before these are presented to the family. This means, historical and archives are mostly only a small fraction of what makes the family fabric, and having these archives do not, by any means, signify that the family would understand, form a shared meaning around, and thoroughly engage with their historical legacy depiction. Managing Inconveniences & Conveniences Addressing all these missing links and the need to understand the complex nature of business family legacies are particularly timely and relevant. As photographs can be coloured, enhanced with filters, and brought back to life with innovative technological tools that all add to and bring out further elements of truths from these pictures, business families also go through and are placed under different new innovative microscopic and other lenses. These may direct attention to not yet explored and surprising territories and may hold reputational risks, and asymmetric threats to the families and their communities, and beyond. These territories, depending on the angle the light is shining on them, can bring excitement and amusement or even a potential crisis that needs to be mitigated. Associations, business practices, family characters that were accepted in the past might have been praised or hidden (intentionally or not), may now cause serious headaches to families. At the same time, hidden characters or long-forgotten tales, centennial family best practices may take new centre-stage as they receive a sometimes even unexpected positive light, and are perceived and surrounded by different rewarding narratives. Assumptions and new labelling practices may either come handy or bring frights to families. Many sustainability-driven family business best practices that have been followed for decades or centuries are now taught as case studies at prestigious universities, and followed by not only business family peers, and their communities, but also by the corporate world. Diversity, educational, talent-based, and other types of inclusivity-related long-established activities by business families are also further accentuated and celebrated, and taken as examples for other families, and beyond. The Shaping of Narratives In fact, as more female family members take up and thrive in substantial roles in the family or in one of their entities as family principals, some family members even begin to wonder how their family stories and key narratives could be different had any of their female family members been in the driving or narrating seat in the past, or at least would have received more representation or influence in shaping them during the course of their family history. The Elasticity of Family Legacies We are experiencing shifts in perceptions, evaluations, expectations, and, consequently, in the narratives that families need to be proactively driving to best represent their own family, employees, business and different other entities, and their wider communities. Due to all the aforementioned narrative shifts, as well as the invaluable legacy marks that the next generations will be adding to the family legacy, it’s critical that business families hold a nature of plasticity and elasticity to their legacy. Especially, as the next generation already have different sets of aspirations and expectations about their roles, responsibilities, the roles the family should play in their life, and in the lives of their communities. Family legacies should be able to withstand pressure and portray resilience as the new threads are pulled out or reveal themselves in various shapes and weight of importance. These continuously shaping legacy features should also be reinforced and highlighted to family members, as well as to their communities, as well as the family’s best practices on how to handle them efficiently and in a meaningful way. Therefore, archives, libraries presented by historians and archivist do serve as a recollection of historical facts and portraits, however, they do not cover the legacy curation and narration aspects in their entirety at all. Legacies need to be first understood, interpreted, and continuously re-interpreted, and have a sense of fluidity and ideally also a springy character to them too, to be able to promptly capture, absorb, and reflect the zeitgeist and signal the future for generations to come. About the Author - Zita Nikoletta Verbényi is the Founder and Legacy Aesthete at The Legacy Atelier, and the 1st PhD Candidate in Family Legacies.

Only 40% of family-owned businesses reach the second generation, 13% get to the third, and just 3% are passed down to a fourth generation and beyond. To build legacy, It’s critical to create an effective governance structure that serves the family and the business. Conflict around who makes the decisions in a family-owned business can destroy that legacy before it gets started. For owners of a family business, “Governance” is a dirty word. For many founders and G2 owners, their biggest fear is the mistaken belief that governance means an outsider is going to start telling them what to do. Or, worse, someone else in the family will be looking over their shoulder second-guessing everything. This article will discover: What Governance really is Generational Phases and how they impact governance structures How to build a governance structure that serves the business and the family What Governance really is: Have you, or any members of your family ownership team, ever held any of these beliefs? “I don’t need someone else to tell me what to do.” “This is our business, we’ll run it our way.” “Our company is too small to need a board of directors.” “An outsider will just steal our business secrets and go somewhere else.” “Governance” simply means “Decision making.” It’s an accepted legal and business term for the processes you put in place to make sure things get done properly within your given range. Those processes are critical for the long-term survival and growth of your business, and they’ll get done even when you’re not involved in every decision. Within an effective governance structure, owners are free to concentrate on the actual path of the business. You get to answer the questions: Where are we now? Where are we going? How are we going to get there? What are our next steps? Who’s going to do what? And Who will be in charge in the event of [fill in the blank]? Creating this structure is no different from writing a new-employee manual. Governance helps family members, owners, investors, and employees understand how to run your business. Most importantly, whether you as a family member are involved as an owner, manager, or board member, or if you’re part of the operational team, you control the process of governance. That’s the watershed moment, when an owner understands that they’re already doing governance. Governance provides the framework so owners and managers can navigate the different phases of their business: starting, managing, owning, and investing. More on phases later. Frameworks include approval levels, strategic discussions, and business reviews. It means understanding what you should do going forward, regardless of whether you do it yourself or someone else does it for you. Governance is about helping you manage the business, so things get done correctly. For example, when there’s an approval required to make an expenditure, it’s usually a matrix. If it’s this much, it goes to so-and-so; if it’s that much, it goes to so-and-so. If it’s above a certain dollar amount, then it’s always communicated to so-and-so for approval. Maybe you have a rule about pricing, the way car salespeople must “get my manager's approval” on the deal. Or the rule says you can’t make a capital acquisition, buy a building, or buy a company, without approval. Generational Phases and how they impact governance structures: Family businesses evolve through phases that are shaped by generations of the family and their role in the business. The phases of generational evolution and their impact: Starting a business – In the beginning, the founder(s) drives the Governance structure. It’s “My way or the highway!” There is no need for an elaborate structure for governance since the management, ownership, and approval authority are one in the same. Managing or joining the business - The Governance structure can include a management team. It can also include an operating Board to oversee the business. This phase may involve a small or large number of family members, both shareholders and non-shareholders, depending on the number of generations. It’s important that the governance structure includes the authority designations, rules and communication processes to get things done properly. Ownership – This phase is when the family members have stepped out of the business and merely provide oversight to the professional management. It typically includes a Board of Directors, with both family and non-family members. There may also be a family “board” or family council, to oversee the operational Board. So, there is a structure for the family, and a structure for the business. Trust and communication between the two are critical. Investing/Divesting – This phase is when the family is even further removed from the role of oversight of a single asset and engages in the investment decisions of the family wealth in a number of companies or ventures. This is frequently known as a “Family Office.” The governance structure for this would be very much like the ownership phase of a single company. Throughout that evolution, there is a potential for conflict between generations. Putting the business first can create tension between family members. That’s why it’s so important to pay attention to the family architecture and engage as many generations as possible. Consider the impact it should have on both succession planning and developing the family governance structure that fits best. How can you apply this? It starts with evaluating what phase you are in, and where you’re headed. Ask yourself: What phase do you believe you’re in? Are you ready to move to the next phase? When will you be ready, and who will take over your old role? What skill(s) do you have to add or let go of to move to the next phase? Who can help you do that? Keep in mind that the phase of the business drastically impacts governance structure. It can affect the overall point of view, individual roles, and long-term expectations of all of the stakeholders. Entrepreneurial, first-generation owners need reassurance that “governance” won’t mean someone else is telling them what to do. Founders should understand that they will be shaping the initial governance and maintaining its form and application. The evolution of good governance is a continuous journey, even in a 100-year-old family business. How to build a governance structure that serves the business and the family. This process of developing an effective governance structure that positively serves both the business and family can be challenging. Family governance structure, business governance structure, and the intersection of the two must be considered when building the next phase of your legacy. The Board of Directors, management, and shareholders will also be vital components in this process. How do you build a governance structure? It starts with building trust through respect and communication through generational engagement. Frequent updates on company progress foster transparency and build trust. Family Values (these are defined by the Founder. Is the family aligned?) Purpose Direction The process will evolve into a set of rules for oversight and processes for decision making, which ultimately create the approval matrix. To apply this process to your family and business, consider these critical questions about communication: How does the family communicate its desires or expectations to the management of your company? Do you feel that the communication between the family and the business is open and respectful? Do you believe that members of the family feel that they have an opportunity for their voice to be heard? Do you have effective family employment and development policies and processes? To protect the family business, make sure your governance structure remains relevant. Establish a cadence for frequent reviews of the documents necessary for business continuity. Merely having the documents isn’t enough. If a shareholder agreement says one thing, and wills and trusts say another, that’s a problem. It’s critical to continually evaluate agreements among stakeholders for consistency. Families and boards must act in concert. Structures, like family ownership councils, can move a business without a board in the right direction. But don’t wait until the business has become overly complex to define and document your governance frameworks. Finally, keep in mind that ultimately, the quality of decisions equals the quality of data. About the Author: For more than 40 years, Charlie Leichtweis has been helping family businesses establish best in class governance as an executive, advisor, and board member. He's the author of two books, The Power of Respect, and The Power of Legacy. Also, he hosts the Power of Respect in Business podcast, which explores various topics about the dynamics and challenges of family businesses. If your family is struggling with how to remain in control through generational changes, please contact charlie@expertsinhow.com to set up a free consultation.

Running a multigenerational family business is not merely about ensuring financial success across decades; it is about preserving a legacy, fostering bonds between family members, and navigating complex dynamics that transcend typical business challenges. A family business that survives through generations speaks to resilience, adaptability, and a unique blend of personal and professional commitments. However, this journey also entails its own set of challenges, from succession planning to maintaining shared values while responding to evolving market demands. The Essence of Legacy One of the defining features of a multigenerational family business is the idea of legacy. For many families, a business is more than a source of income; it represents a story of shared aspirations, sacrifices, and achievements that began long before the current generation was even born. To run such a business means to understand that each decision not only impacts the present but also echoes into the future, potentially shaping the lives of children and grandchildren. At the heart of this legacy is the founder’s vision. Whether the business began as a small, local endeavour or a large-scale enterprise, the values established by the founder often become a touchstone for future generations. These values—whether rooted in customer service, innovation, or a commitment to the community—serve as the foundation on which the business is built and sustained. Over time, preserving these values can become a crucial part of the family’s identity. Navigating Succession Obviously, one of the most challenging aspects of running a multigenerational business is planning for succession. Unlike traditional businesses, where leadership transitions are typically merit-based or dependent on external recruitment, family businesses must balance internal familial dynamics with the strategic needs of the company. This often involves questions of fairness, readiness, and capability. Succession in family businesses is both an emotional and practical issue. On one hand, the current leadership must trust that the next generation will honour and preserve the company’s legacy. On the other, the incoming leaders must prove they are capable of guiding the business through contemporary challenges, which may require adopting new strategies or rethinking old paradigms. This often leads to tensions between older and younger generations, where the latter may push for modernisation, while the former fears that change could undermine the business's foundational principles. Careful succession planning involves nurturing and mentoring the next generation from an early age, ensuring they have not only the skills but also the passion to take on leadership roles. Many successful multigenerational family businesses develop formal transition plans that include training, mentorship, and leadership responsibilities well before the older generation steps down. In this sense, succession becomes a gradual process, ensuring that the next leaders are prepared to carry the business forward. Strengthening Family Bonds and Values For many families, the business serves as a unifying force. Shared responsibility for the company can foster deeper connections between family members, especially when they collaborate to achieve common goals. A multigenerational business offers a unique environment where family values such as trust, integrity, and hard work are deeply intertwined with the company’s mission. However, these bonds must be actively nurtured. Family conflicts can easily spill over into business operations, creating tensions that could be detrimental to both the company’s success and family harmony. To prevent this, many family-run businesses implement clear communication structures, regularly scheduled family meetings, and well-defined roles that separate business responsibilities from personal relationships. A strong governance framework that outlines decision-making processes can help prevent power struggles and ensure the business remains resilient despite internal disagreements. Furthermore, ensuring alignment between family values and business practices helps maintain a sense of purpose. For example, some multigenerational family businesses make a point of investing in their communities or promoting sustainable business practices because they see the company not just as a financial engine but as a force for positive social impact. These shared values can unite generations, giving the younger members of the family a reason to feel proud of their heritage and invested in its future. Adapting to Changing Markets While tradition and legacy are essential to the identity of a multigenerational family business, it is equally important for these businesses to evolve with changing times. Market dynamics, technology, and consumer preferences are constantly shifting, and businesses that fail to adapt risk becoming irrelevant. One of the greatest strengths of a family-run enterprise is its long-term outlook—unlike publicly traded companies driven by quarterly profits, family businesses often prioritise sustainability and incremental growth. Nevertheless, maintaining this balance between legacy and innovation is challenging. The older generation may resist change, holding fast to strategies that worked in the past, while the younger generation may push for modernisation and adopting new ways of doing things. Striking the right balance between respecting the business’s history and responding to new market trends is key to long-term survival. Some multigenerational family businesses tackle this challenge by diversifying their operations. For example, a family business that started as a manufacturing company might expand into services or technology sectors to stay competitive. Others might incorporate innovation within their existing frameworks, adopting new technologies to streamline operations or using social media to reach younger consumers. The Emotional Dimensions of Ownership Beyond the business aspects, running a multigenerational family business comes with significant emotional weight. The family’s identity and history are deeply interwoven with the company’s success. For many, the idea of the business failing is not just a financial blow—it’s a personal loss that affects the entire family. This emotional connection can be both a source of strength and vulnerability. On the positive side, it fosters loyalty and a deep sense of responsibility toward the company’s success. Many family businesses benefit from the fact that the family is personally invested in its long-term viability, which can lead to more prudent decision-making and resilience during challenging times. On the other hand, this emotional attachment can sometimes lead to difficulty in making tough decisions, such as downsizing or selling off parts of the business that are no longer profitable. Family members may also struggle with personal identity issues, particularly when they are expected to take on roles in the business that do not align with their own aspirations. For some, stepping into leadership positions may feel like an obligation rather than a passion. The pressure to continue the family legacy can be immense, especially if individual interests do not align with the business. A Unique Blend of Family and Enterprise Running a multigenerational family business is an intricate balance of preserving the past while adapting to the future. It requires navigating the personal and professional with care, ensuring that both the family and the business thrive in harmony. The challenges—succession planning, maintaining values, fostering innovation, and managing emotional dynamics—are unique but not insurmountable. Ultimately, the success of a multigenerational family business depends on its ability to honour its roots while embracing change. Families that can manage these complexities are not just preserving a company but are sustaining a legacy that offers both financial security and a shared sense of purpose across generations.

One of the many things to set family-owned businesses apart from other commercial enterprises is the question of legacy. However, in a wider sense, the concept of legacy runs deeper than simply the financial footprint a business leaves, and involves the degree to which it gives back to the wider community, either directly or indirectly. While business success and social interaction may seem distinct, the fact is that they are often closely intertwined. A large part of establishing a trusted reputation may be based squarely on traditional business virtues such as competence and value, but the modern consumer demands much more of their most trusted businesses than simply delivering what it says on the tin. Knowing What Is Important To Your Customers Issues such as environment, social and governance (ESG) and diversity, equity and inclusion (DEI) are increasingly driving consumer choices, as highlighted by PR Week, which cited research showing that: 78% of people felt that companies have a responsibility to be good citizens 71% of people expect companies to launch ESG action 46% of people would be prepared to pay more for better ESG performance 46% of consumers said environmental concern was the most important ESG issue 28% of consumers said that social action was the most important issue The growing demand for action on these issues is much more prevalent amongst consumers who are part of the Millennial and Gen Z generations (those aged between 12 and 43 years old) so any family business building for the future and with legacy in mind needs to focus on the kind of issues which consumers in this cohort regard as being vital to building trust. An in-depth report published by the Enterprise Research Centre took the form of a wide ranging review of existing evidence on the social-economic contributions that family businesses make in the United Kingdom. Almost 3 in 5 family businesses in the UK state that their long term goal is to make a contribution to the community and leave a positive legacy; and many avoid short term strategies that might impact negatively on stakeholders, pursue business strategies which improve community relationships and build positive relationships with external stakeholders. The instinct to give something back is hard wired into the way they operate! Engagement Any family business wishing to give back to the wider community needs to carefully plan the various ways in which it engages, rather than simply relying on ethos and instinct to lead it in the right direction. A good start is an audit of existing community engagement activities and any planned additional activities. Ask yourself whether the engagement with the community can be delivered via general business activities or needs a specific initiative, what resources will be required, and whether extra engagement value can be added to anything you’re already doing. Then maximize the chances of delivering value and impact by: Identifying the communities or individuals you want to reach on the basis of factors such as geography or common interests. Alternatively, your target could be a community or group with a link to your employees; another business or an advocacy group that resonates with you. Identifying the prospective benefits you hope to gain from engagement. As well as increased sales driving higher profits thanks to the appeal of ESG, or the ability to attract the best new recruits, for many family businesses, the motivation behind engagement will involve wider legacy-based impacts such as enhancing the family’s reputation as an important cog in the local community and as people who give back to society. Actions designed to give something back will also help to embed the business’ values across the business and into the next generation. Planning your activities in detail on the basis of needs identified in the wider community and the ability of your business to meet those needs. Establishing a system of on-going monitoring to evaluate the impact of what you do against the resources needed. Making the most of the marketing potential of your activities by reporting across a range of channels, from in-depth reporting to social media postings - within your business as well as externally, as this will help to ensure buy-in for your on-going efforts. ESG Regulations The UK currently lacks a unified ESG law or regulation, relying instead on a mix of domestic and EU-derived laws, many of which are not explicitly focused on ESG. The Companies Act serves as a principal regulation for ESG disclosures, mandating annual reports from large companies meeting specific criteria, such as having over 500 employees or exceeding £500 million in turnover. However, recent updates to the Act now also require these companies to include sustainability details, such as energy use and carbon emissions, in their reports. Certain sectors and large organisations face industry-specific standards, such as the optional Sustainability Reporting Standard in the housing sector, pointing towards a more specialised approach to ESG reporting. The introduction of Sustainability Disclosure Requirements (SDRs) in 2023, marked a significant step towards more detailed ESG reporting in the UK, with mandatory disclosure anticipated by 2025. Whilst mandatory ESG disclosures are predominantly only required of large companies, there is a trend towards expanding these obligations to include smaller firms. Some smaller companies are starting to report on ESG matters voluntarily, either to anticipate future regulatory requirements or in response to investor demands and to appeal to a more informed workforce. This shift highlights a growing trend in the importance of ESG reporting across businesses of all sizes and sectors. Should you require assistance or support in any aspect of your family business, the team at Buckles  can offer impartial, experienced guidance on all aspects of ownership transferal. Contact us now to discuss the options available.

Family businesses play a crucial role in economies across the globe. They create jobs, strengthen community ties, and build wealth that lasts for generations. However, these businesses face unique challenges such as succession planning, governance issues, and family dynamics. Strengthening a family business legacy calls for careful planning and deliberate effort. What enduring strategies can help family businesses thrive and continue their legacies? Embrace Open Communication Fostering open communication is essential in any family business. Creating a space where all family members can share their thoughts and feelings promotes trust and minimises misunderstandings. For example, scheduling weekly or monthly family meetings can provide a structured platform to discuss business operations, set future goals, and address any concerns. When everyone feels included in decision-making, they are more likely to feel valued and engaged. For instance, when family members can give feedback on operational changes, it cultivates a deeper commitment to the business. In fact, businesses with strong communication practices can experience a 25% increase in employee engagement. Define a Clear Vision and Values To create a lasting legacy, it is crucial to establish a clear vision and set of values that guide the family business. A shared vision fosters unity and aligns family members toward common objectives. For example, a family business might come together to define their mission as providing sustainable products that benefit the environment. This shared focus not only creates a sense of purpose but also holds the family accountable for reaching its goals. Studies show that businesses with a defined purpose can see a 20% increase in productivity among employees. Establish Succession Planning Succession planning is vital for the long-term sustainability of family businesses. A strong plan identifies future leaders and prepares them for their roles. Consider involving younger family members as early as possible. For example, giving them responsibilities in small projects can help them learn the business's ins and outs while building their confidence. Additionally, aligning their strengths and interests with business needs increases chances for success. According to a survey by Family Business Magazine, 75% of family business owners believe that early engagement leads to smoother transitions. Having a clear timeline for succession and keeping family members informed can prevent conflict and ensure a seamless transition. Foster A Culture Of Continuous Learning Promoting a culture of continuous learning is critical for innovation in family businesses. Investing in training and professional development can enhance skills and prepare the business to adapt to new market trends. For instance, sending family members to industry conferences or workshops can yield insights that benefit the business. Research shows that companies that invest in employee training can see up to a 24% improvement in overall performance. This commitment not only empowers individuals but also leads to a more competitive business. Implement Strong Governance Structures Implementing strong governance structures is essential for navigating family dynamics while managing a business. Creating a board of advisers or governance policies can help separate family disputes from business decisions. Specifically defining roles within leadership can reduce the likelihood of conflicts arising from personal relationships. According to a study, businesses with effective governance structures experience a 30% improvement in decision-making efficiency. These structures provide a solid framework for accountability, which is key to maintaining professionalism. Engage in Philanthropy and Community Involvement Integrating philanthropy into the business strategy enhances the company's reputation while creating a meaningful legacy. Encouraging family members to participate in community service or support non-profit initiatives instils a sense of responsibility. For example, a family business might commit to donating a percentage of profits to local charities, which fosters unity and social responsibility within the family and the community. A study indicates that businesses engaged in community activities report customer loyalty rates that are 50% higher than those that do not participate. An enduring legacy can stem from a commitment to social well-being, amplifying the impact of the business. Develop a Conflict Resolution Framework Conflict is common, and in reality is a necessary component in family businesses, arising from differing opinions, financial matters, or emotional issues. Having a clear framework for conflict resolution can help manage these challenges effectively. Establishing guidelines for resolving disputes can streamline the process and minimise stress. Techniques such as mediation or consulting with external experts can provide neutral perspectives that enhance understanding. According to research, businesses with established conflict resolution mechanisms experience a 40% reduction in overall disputes. By focusing on constructive resolutions, family members can enhance relationships and promote a healthier work environment. Celebrate Achievements and Milestones Acknowledging achievements and milestones—big or small—can significantly boost morale and strengthen family bonds. Recognising hard work and dedication instils a sense of belonging. Whether it is celebrating a successful product launch or a business anniversary, taking the time to celebrate these moments cultivates a culture of appreciation. Research shows that celebrating achievements can increase employee satisfaction by up to 30%. Celebrations not only reinforce family ties but also build motivation and enthusiasm within the business. Lasting Impact of Family Business Legacy Creating a lasting family business legacy is a continuous journey requiring commitment, strategy, and flexibility. By embracing open communication, defining a clear vision, planning for succession, encouraging learning, implementing governance, engaging philanthropically, establishing conflict resolution frameworks, and celebrating achievements, families can lay a strong foundation for future success. Every family business is unique, but these enduring strategies can guide them through challenges. The most successful families realise that their legacy is not solely measured by financial success; it is also about relationships, values, and the positive impact left for generations. By investing in these strategies today, families can ensure their business flourishes well into the future.

Family businesses form the backbone of Britain’s economic and social landscape. Often modest in appearance, they represent a powerful force—woven from generations of hard work, trust, and a deep connection to both place and purpose. From village butchers to centuries-old textile firms, family-run enterprises combine history with resilience, offering a model of sustainability and identity in a fast-changing world. Across the United Kingdom, family businesses account for around two-thirds of all private sector companies and contribute over £600 billion annually to the economy. Yet their true value cannot be measured purely in financial terms. These enterprises embody continuity, community, and culture—traits that are increasingly rare in an era dominated by faceless corporations and rapid turnover. A Heritage of Resilience Family businesses often begin with modest roots—an immigrant’s market stall, a farmer’s dairy, a corner shop that opened during the post-war years—and are passed down with an unspoken understanding of responsibility. This deep sense of heritage helps explain their remarkable endurance. In many cases, they serve not just as a source of income, but as a living archive of values, practices, and local pride. As the business evolves, so too must its model. While traditional skills are often passed from one generation to the next, modern family enterprises are increasingly embracing innovation. Many blend time-honoured methods with contemporary approaches: adopting e-commerce platforms, expanding globally, or redefining product lines to meet modern consumer expectations. The Succession Dilemma Despite their strengths, family businesses face one consistent and complex challenge—succession. Research indicates that a significant proportion do not survive the transition from one generation to the next. This is not due to lack of passion or purpose, but often the result of unclear succession planning, generational disagreements, or differing visions for the future. Navigating the handover of leadership requires not only legal and financial planning, but emotional intelligence. Successful transitions typically involve mentoring the next generation, establishing governance structures, and balancing tradition with innovation. When managed effectively, succession can strengthen both family bonds and the long-term prospects of the business. A Changing Landscape of Leadership The profile of family business leadership is also changing. Women are playing an increasingly prominent role, stepping into leadership positions across industries once considered traditional or male-dominated. This shift is transforming how legacy is defined—focusing more on inclusivity, sustainability, and community impact. Family businesses are also at the forefront of responsible entrepreneurship. Many prioritise long-term relationships with employees, customers, and suppliers, valuing stewardship over short-term gain. This outlook tends to foster loyalty and trust, further anchoring these enterprises in the hearts of the communities they serve. A Legacy Worth Preserving At the heart of every family business lies a powerful narrative—a story of origin, effort, and aspiration. These stories matter. In a market increasingly saturated with mass production and impersonal service, the authenticity of family-run enterprises stands out. Whether it’s a baker who kneads dough using a century-old recipe or a vintner who harvests grapes from family-owned vines, their work speaks of care and continuity. Family businesses are not just commercial ventures. They are cultural institutions, keepers of tradition, and bridges between past and future. Their legacy is not merely in profit margins, but in the values they uphold and the communities they shape. Ultimately, the family business is more than a model—it is a mindset. One that cherishes longevity over speed, identity over scale, and people over process. As Britain continues to evolve, these enterprises remain quietly but profoundly essential.

The media coverage of “The Great Resignation” has raised the profile of the ongoing and critical role of the board in succession planning. Good boards and smart directors plan the succession of the CEO to ensure a smooth transition in the leadership of the organisation, with minimal disruption and business continuity. Succession planning takes time and effort, and while the best made plans can sometimes fail, it’s always better to have one than to be caught in a position without a plan, or a clear leader. Family firms have the advantage in that they can take the long-term perspective and are not obliged to respond to the volatile sentiment swings that sometimes characterise the public listed markets. At least once per year the board should think about succession for the CEO. However, it’s not something family firms should look at shortly before a CEO comes towards the intended end of their term or reaches retirement age. What happens if they have to leave a board unexpectedly at short notice? It could take many months, even more than a year to source a suitable replacement, particularly if looking for someone external to the business, which could have a significant impact on the effectiveness of the organisation and board. Having a succession plan is even more important where the departing CEO may have had unique skills or experience, such as in mergers and acquisitions, which is vital to the organisation’s growth and future success. Once boards start to create or revisit the CEO succession plan, which they should do at least annually, they need to consider four key factors: 1) Clarity On The Role Of The Business Family firms need clarity on the future role and direction of their business. Is it about making as much money as possible, evolving into a social enterprise, providing jobs for family members, or something else? Only then can the appropriate succession plan be formulated, along with a clear brief and job specification for the CEO. On the theme of clarity, being transparent with candidates about what the role entails at the recruitment stage is crucial. Starting at the job specification and interview stage, through to the CEO’s appointment and beyond, role clarity is at the heart of a successful succession process and an effective board. If there is any ambiguity the CEO is set for failure. 2) Consider What’s Needed To Bring The Strategy To Life Forward thinking boards recognise the importance of diversity on the board to help bring the strategy to life. This is vital for family-owned businesses which may have a board loaded with family members who have the same way of thinking and outlook. A CEO with a different demographic background, experience, skills, thinking styles and circles of influence is often just what is needed to breathe life into the strategy and help take the family business to the next level. For example, if there is a lack of digital skills at a senior level it’s important to have someone on the board who has skills in this area, with digital disruption being a key driver of business success. If the board is adamant they want the next generation of the family to take over as CEO, then prepare them properly. An important part of this may involve encouraging them to leave the firm for a number of years so they can experience different businesses, new ways of working and learn new skills. Leading on from this, when recruiting a CEO family firms should bear in mind the importance of a good mix of thinking styles on the board, particularly across the four lines of sight – oversight, hindsight, insight and foresight. This is crucial to deliver an effective board and ensure it provides maximum value, and why it’s important that owners seriously consider appointing a CEO from outside their family. 3) Set Clear Performance Indicators For The CEO The new CEO will need to know how they will be expected to steward the creation of value, and therefore what they will be evaluated on. Clear performance indicators must be confirmed prior to an appointment being made. Then regular reviews of the CEO are vital to assess their effectiveness, identify opportunities to develop and ensure they are “fit for the future.” After the challenging last 18 months it’s more important than ever that these reviews should take place, at least annually. If a review highlights issues with the CEO (even if it is one of the owners) it may prompt the board to consider if a new one is needed. This makes it even more critical that a watertight succession plan is in place. It’s also worth bearing in mind that planning for the exit of the CEO and onboarding of the new one is part and parcel of the succession process. 4) Onboarding The onboarding, or induction stage, is the final step in the succession process. With many boards operating in crisis mode and virtually due to the pandemic, it’s vital that the new CEO is able make a meaningful contribution to board deliberations from the start of their tenure. This can only be achieved via a formally structured “journey of learning” induction plan over 18-24 months. This includes a programme of visits and experiences, a buddy system and governance training. By taking these four steps boards will be in a good position to deliver a smooth and effective CEO succession process and help engender an effective board. About the Author - John Harte is the Managing Partner at Integrity Governance where he 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.