Perspectives on family-owned businesses
Governance and succession planning
While the operational demands of running a family business can be all-consuming, it is important for these companies to take time to focus on how board oversight may improve the business, and to consider how to groom the next generation of leaders. Why? Because gaps in governance and a lack of succession planning can impact long-term success.
Deloitte conducted a survey of family-owned business owners and executives to explore the areas of governance and succession planning. This report examines the concepts of governance as a strategic asset, and succession planning as an operational imperative; survey findings highlight opportunities for improvement and potential areas of focus for family-owned businesses.
Among the key findings:
- More than a quarter (28 percent) of respondents from family-owned businesses indicated that they do not have a board of directors.
- Close to half (49 percent) of respondents say they only review succession plans when a change in management requires it and 41 percent do not have leadership contingency plans.
- A significant majority, more than 80 percent, say their boards have no term or age limits on membership and one-third do not evaluate board members’ performance.
About the survey
A total of 222 survey respondents from family-owned businesses with annual revenues from $50 million to more than $1 billion provided their insights for this survey; 93 percent were senior executives. Respondents represented 10 industry sectors and 36 states.