In addition to the growing maturity of their businesses, KPMG Private Enterprise finds that family business leaders are becoming increasingly aware of the impact that the changing demographic landscape is having on how various members of the family view the future of the business and the role they may play in it.
KPMG Private Enterprise and the STEP Project Global Consortium recently collaborated on a research project that includes a co-authored article series that has highlighted the impact of changing demographics on family business practices, including family governance. As part of this research, three important insights were gained about the impact that every generation in a family business can have on its governance practices.
First, senior members of the family have the benefit of reflection. They are able to look back at what they have built and pass on what they have learned during various changes in the family’s approach to the business and the governance mechanisms that have supported it.
Second, next-generation members of the family have a fresh perspective to contribute. Their diverse views can be valuable in helping to address the challenges that the current generation may be facing in both the family and in the business by being exposed to differing points of view.
Finally, and perhaps most importantly, next-generation members of the family have the opportunity to look forward by being involved in co-creating the future family governance practices that they will ultimately oversee.
The key in all of these experiences and perspectives is to create a family governance system that can balance both stability and change. The goal of good family governance is to make sure that family members stay connected and have opportunities to voice their concerns and share their emotions in a professional setting. And an effective governance system should help to prepare the family and the business to deal with whatever lies ahead.