Marine Fabricator May/June 2020 - 18

Succession Roadmap

I

n a family business, three
interdependent systems-family,
business and ownership-overlap
and interact, making succession decisions
more complicated, but also potentially more
rewarding, says Stephen P. Miller, president
of GenSpan Inc., in Asheville, N.C., and
co-founder of the Family Enterprise Center at
the University of North Carolina at Chapel
Hill. Miller outlines some of the key topics
and responsibilities associated with creating
a family business succession road map:

Business System Tasks

Family System Tasks

*	Determine the education and training
required for company leaders, mentoring,
outside work experience with real responsibility
and accountability.

*	Articulate why the family is in business together.
*	Determine if there is a desire to continue family
ownership of the business by future generations.

*	Create, review and/or revise a detailed strategic
plan to achieve family owner goals.
*	Evaluate market dynamics for opportunities
and threats, and develop strategic responses.
*	Evaluate the company's strengths and weaknesses,
and create plans to build on the strengths and
reduce or compensate for the weaknesses.
*	Identify and develop leaders needed to execute
the company's strategy.
*	Identify family members with the necessary
skills and interest to join the family firm.

*	Create a shared vision for the business.

*	Establish defined roles for family and nonfamily
employees within firm.

*	Establish values that guide the family's actions
and influence business culture.

*	Identify nonfamily leaders key to the
future success of the business.

*	Define the family's goals for the business.
*	Define financial goals and non-financial goals.

*	Create development, compensation and
career plans for each nonfamily leader.

*	Determine incumbent and future leaders
of the business.

*	Clearly communicate succession plans
and define individual roles in that plan.

*	Clarify which family members are not involved
in the operation of the business.

*	Develop an exit plan for the incumbent leader(s).

*	Establish a regular schedule for family meetings
to discuss business and ownership issues.
*	Consider developing a family council if the
family is larger than just one nuclear family.
*	Establish policies on key issues like family
employment, conduct, decision-making,
conflict resolution, conflict of interest and
policy enforcement.

*	Determine desired succession role for incumbent
leader during the succession process and once
leadership transition is complete.
*	Create a management task force to
develop, execute and evaluate progress
on the succession plan.
*	Identify who makes decisions on succession:
incumbent leader, board of directors, advisors?
*	Establish a process for making
succession decisions.

Ownership System Tasks

*	Establish a timeline for succession plan.

*	Work with legal and accounting professionals
to address financial issues.

*	Create a communication plan to foster open,
transparent communication at appropriate times
with key stakeholders, including shareholders,
family members, employees, customers, bankers,
advisors and vendors.

*	Create an estate tax plan.
*	Develop a plan for transfer of ownership.
*	Create a shareholder agreement.
*	Establish a governance system for the business.

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4/23/20 3:10 AM
Marine Fabricator May/June 2020

Table of Contents for the Digital Edition of Marine Fabricator May/June 2020
