Continuity
Family Council and Charter of Values
Family Strategy offers advice and support to families on the creation of family governance and internal regulations. The outcome of which is to protect and preserve the family legacy for future generations by establishing a vision and direction for the continued growth and transfer of wealth, based on what matters most to the family, providing guidance around expected behaviours for the long-term and helping to create joint decision-making bodies.
Succession Plans & Managing Change
Supporting the family to build structures and solutions that mitigate risks related to conflict, division and loss of wealth value.
Next Generation Talent
Evaluating and assessing the capabilities and potential of younger family members in addition to strengthening them to prepare them for future roles within the family.
Premise
No family business is the same. Each family is its own unique and complex entity, comprised of three coexisting elements:
- Family
- Heritage
- Business
Within this ecosystem, each family must confront cycles of change, uncertainty and development that make it more challenging to successfully manage ownership structures and navigate family dynamics.
This increases the risk of family members leaving, family divisions and disputes within the family.
The ability to traverse the delicate period of intergenerational succession and effectively transfer control over to the next generation is fundamental to the ongoing prosperity and continuity of the business. It ensures continued development for years to come and maintains familial harmony.
Early, strategic planning is essential for an effective and stable wealth transition. It transforms the process into a passage unique to each family, rather than an obstacle to be endured. A well-thought out, disciplined approach that balances the financial and non-financial elements of the family offers the best chance for lasting success. One that integrates generational synergy and an evaluation of the different attitudinal and emotional profiles of individual members, with the constraints and limitations of inheritance law, tax variability and corporate regulations.
Scenario
Family businesses are the backbone of the Italian economy and its productivity however in order to survive, they must be capable of withstanding some major challenges. The fact that less than 30% of family businesses successfully transition to the third generation is primarily attributed to the inadequate integration and engagement of younger generations in addition to the lack of training.
Selecting successor family business leaders is a complicated process that poses a myriad of emotional, economic and governmental hurdles. Input from both internal and external family members is essential to smoothly transition wealth and values across the generations. This is key to ensuring sustainability in an increasingly competitive and complex market.
Family Council and Charter of Values
Family Strategy offers advice and support to families on the creation of family governance and internal regulations. This provides a clear roadmap for long-term conduct and expected behaviours, and also guides the creation of joint decision-making bodies. It establishes a vision and direction for the continued growth and transition of wealth, based on what matters most to the family.
Succession Plans & Managing Change
Family Strategy advises and supports families in the creation of stable legal structures and solutions that mitigate risks related to conflict, division and loss of wealth value.
Types of solutions:
- Statutory clauses, treasury share purchases, differentiated shares, shareholder agreements, external managers
- Extraordinary / special operations and transactions including mergers and acquisitions, family buy outs, IPOs, investment funds
- Family holdings, trusts, family agreements, limited partnerships
- Wills / testaments, donations, target constraints, estate funds, trustee agreements
- the family structure (divorces, marriages, surviving children)
- the personal aspects of the business leader (disability, death, illness, civil and criminal third part liability)
- residential / lifestyle changes of rights-holders
- the ability to understand and support Next Generation talent
- revision of the governance principles
- insertion of external members in management positions
- opening of capital to industrial partners
- macro-economic changes affecting the business
- importance of asset re-allocation
- contingent liquidity plan for the sale of goods and equity investments
- tax optimization
- external macro-economic and financial factors
Next Generation Talent
The “Rising Generation” present an opportunity for renewal and rejuvenation of a family business. They add value by combining current trends and fresh perspectives with a desire to respect and maintain the history and legacy of prior generations.
This generational mix can potentially trigger divisions, leaving families vulnerable during the process of leadership transition. Understanding the cultural and social dimensions of each generation and plotting a course for transition through education and coaching is fundamental to ensure growth, stability and continuity.
Evaluating and exploiting the potential of younger family members helps prepare them for future roles within the family. Family Strategy promotes the education and empowerment of Rising Generations, inspiring them to build and sustain their heritage while pursuing the aspects that excite them.