Though many family business owners want to keep it all in the family, many are worried about their children’s ability to take charge of the business.
According to a survey of 700 family businesses conducted by KPMG and Family Business Australia, 63 percent expressed concern about the abilities of their successor, and 57 percent said they’re unsure of the motives of their potential successors.
Despite these concerns, 60 percent said maintaining control of the family business is their key priority, 88 percent believe that family values improved the way their businesses were conducted and 24 percent expect to pass their business onto the next generation in the next five years.
KPMG Family Business Head said the survey demonstrates the sense of ongoing stewardship family business owners feel towards their business.
“A sense of stewardship does not disappear simply because an incumbent reaches an acceptable retirement age, or the next generation is ready to take control.”
46 percent of family businesses have a board in place and just 23 percent coordinate an independent review of their management team, highlighting that governance of the family business for many remains relatively informal.
According to Family Business Australia CEO Phillipa Taylor, succession planning and a contingency for accident or illness are two issues that would naturally be on a board agenda in the assessment of key business risks.
“While some family members may feel their business is too small to have a board in place, the benefits of taking that step towards professionalisation have been proven beyond doubt.”
Interestingly, 61 percent of respondents said they pay family members the same as non-family and just 14 percent said they pay family members less.