The survey covers a range of issues including growth, going digital and the increase in professional management of family businesses. A striking finding, however, is that only 1 in 10 of businesses surveyed had a documented, robust succession plan for their business.
The details in PwC’s findings are of interest to anyone involved in a family business, particularly given the comparisons made to other countries:
- over half (57%) of family businesses have next generation family members working in the business, which is on a par with other countries;
- however, less than that (39%) have next generation family members working in senior executive roles in the business and this is where Ireland differs from the international average;
- nearly two thirds of businesses have non-family members on the board of their business and 13% plan to offer shares to non-family members in the next five years;
- very few family businesses have what PwC refer to as a “family constitution” or “family council” in place; and
- over half of businesses do not have a succession plan for key roles in the business.
These findings reflect what is going on in practice: family businesses are growing and bringing in more external help and expertise than was traditionally the case. Increasingly, family businesses are willing to include non-family members in the ownership of the business. However, a significant number have not adequately planned for the future.
Family business owners need to think about succession planning all the time and during the day-to-day course of the business. Traditionally, many family business owners have preferred to keep their intentions confined in their will, the contents of which might only be known after they pass away. Succession planning ensures the smooth, ongoing running of a family business while avoiding costly and damaging disputes when a family member dies or exits the business.
The full survey is available from PwC here. You might be interested in more information and resources on family businesses from Family Business Ireland. We have extensive experience and expertise in helping family businesses plan for the future and implement succession strategies. Read more about the services we offer to family businesses here and contact us to see how we can help.