succession planning

Lawyers and family business experts suggest a divorce like the one Rupert Murdoch is facing could be a big distraction for a company boss, particularly at a time when the business faces challenges – as the Murdoch empire might following its recent split into two firms.

Senior partner and co-founder of Banyan Family Business Advisors Henry Foley said divorce increases tension within the family business, and multiple divorces compound these impacts. Murdoch, 82, filed for divorce from Wendi Deng last week – he has already been through two other divorces.

The process in most organisations, when they are looking for a new leader, is to get a bunch of people to sit hunched in soulless offices and thrash it out over Formica tables and pots of over-brewed coffee. The result is announced by a press release. New popes, however, are elected by a bunch of men fluttering down baroque corridors in colourful gowns, talking in Latin, fidgeting with prayer beads and channelling the Almighty. 

They let the world know what they’ve decided via an eccentric system of smoke-signals. Still, it seems to work.

The spouse of a family business leader could be the answer to smooth succession in Australian family businesses, according to research.

The study, by the Australian Research Council, financial advisers Pitcher Partners and Melbourne-based Swinburne University, found many family businesses leaders were wary of involving their spouses in succession planning.

Management buyouts can help ensure a family business stays in the hands of people who care about the company and have worked hard for its success, according to a private bank.

Family businesses may be reluctant to opt for a management buyout, but if succession plans fail, then it could be a good solution, said Mark Evans, head of Coutts Institute.