The New Era Of Family Business Succession

Succession is no longer just about who inherits control, but how the next generation will lead. As global uncertainty deepens, the resilience of family firms depends on whether they can professionalise governance, embrace digital transformation, and align multiple generations around a shared purpose. 

From Inheritance To Multigenerational Capital Transition 

For generations, succession in family businesses meant the transfer of ownership and management from parent to child. Today, it means so much more: a multigenerational capital transition that includes not only financial assets but values, purpose, and governance.  

According to KPMG’s Global Family Business Report 2025, the world’s most successful family enterprises combine entrepreneurship with robust governance frameworks to sustain growth across generations. The research found that two thirds of high-performing family businesses have formal boards, and those with strong governance are 43% more likely to outperform peers. 

For example, Germany’s Haniel Group has thrived for over 260 years by professionalising its supervisory board and introducing next-generation members alongside external experts, ensuring continuity while adapting to new markets. 

When governance evolves alongside generational change, it transforms succession from a moment of risk into an engine of renewal. 

The Trust And Alignment Gap Between Generations 

PwC’s SEE NextGen Survey 2024 highlights a widening trust gap between current leaders and their successors. In Europe, only 47% of next-generation leaders report strong trust between family members, and just over half are aware of a formal succession plan.  

Many believe their parents’ generation is reluctant to retire or share authority. At the same time, the rising generation has ambitious goals: 52% cite growth as their top priority, followed by diversification and digitalisation. 

This tension reflects a broader truth. The next generation sees change as an opportunity, while incumbents often see it as a risk. Family business boards that can bridge these views through clear governance and transparent dialogue will be best positioned to balance continuity with transformation.  

When LEGO’s fourth generation restructured its board and invited external directors, it helped connect generational perspectives, preserving family control while professionalising decision making. 

Professionalising Governance Without Losing Purpose 

One of the most important shifts in modern family businesses is the move from a ‘family in business’ to a ‘business family’. As KPMG’s report notes, this transition requires a more formal and professional approach to leadership.  

High-performing family enterprises often separate ownership from management, bringing in independent board members and external executives while maintaining strong family councils that preserve identity and values. The Ferragamo family, for instance, appointed a non-family CEO while keeping a family Chair to ensure both professional expertise and brand heritage remained central. 

KPMG’s findings show that nearly half of high-performing family firms scored strongly on sustainability indicators, proving that governance and responsibility are intertwined. Purpose, in this sense, is not a constraint on growth but its compass. 

The Digital And AI Generation 

The rise of generative AI is testing how adaptable family businesses can be. PwC’s Global NextGen Survey 2024 found that 73% of next-generation leaders see AI as a powerful force for transformation, but only 7% of family firms have implemented it meaningfully.  

In Europe, 47% are still in early exploration and only 6% have deployed AI across operations. The generational contrast is clear: younger leaders are both more optimistic and more digitally fluent, while current leadership often takes a cautious approach. 

Those that act early can strengthen efficiency, decision-making, and innovation while reinforcing the family’s reputation for responsible leadership. Stewardship in the 21st century means not resisting change, but guiding it responsibly. 

Building Resilience Through Purpose And Disciplined Growth 

Sustained success in family businesses depends on aligning long-term purpose with disciplined execution. KPMG’s research shows that high-performing firms are those that diversify revenue streams, attract external capital, and professionalise management while maintaining the values that define them.  

46% of top performers report strong family relationships as a key differentiator. 80% of those with high sustainability scores also demonstrate high business performance, showing that the most resilient are purpose-led firms. 

In times of volatility, adaptability matters more than scale. Family businesses that balance tradition with agility are better equipped to navigate shifting markets. Those that treat mergers, partnerships, or AI adoption as strategic levers, rather than threats to legacy, are turning uncertainty into competitive advantage. 

The Next Era Of Family Leadership 

The future of family enterprises will depend on their ability to align family values with professional governance and forward-looking leadership. 

CEO succession in family businesses demands early planning, clear governance, and alignment between family values and business strategy - it is both a strategic and deeply personal moment. Family CEOs bring cultural continuity but risk bias; non-family leaders offer objectivity and fresh perspective yet may face resistance. The strongest transitions blend professionalism with shared purpose. 

In an age of uncertainty, the most resilient family businesses will be those that view succession not as the end of one chapter but as the strategic beginning of another. Odgers’ leadership experts partner with family organisations to help ensure they can be sustained by the values that made them enduring in the first place.

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