When building a succession plan for the family business, it's important for all family members to be clear on expectations and accompanying roles & responsibilities. (UBS)

Returning to our living rooms on 26 March is the fourth and final season of HBO’s critically acclaimed hit, Succession and beyond the drama, the comedy, and the repeated calls to “clear the room,” Succession has brought the perils of succession planning, or lack thereof, into the spotlight. The show focuses on a powerful media conglomerate and the billionaire patriarch, Logan Roy, who is regularly pitting his children and company insiders against each other in a power struggle full of schemes, backstabbing and biting one-liners as they each hope to lead the company and the family into their next chapter. Chaos ensues.

As the head of UBS Global Wealth Management’s Business Owners and Multigenerational Wealth client segments with a focus on this very topic in real- life, I can say that while the drama of the Roy family is extreme and outlandish, it does serve a great purpose in highlighting the stakes of a good succession plan for a business, particularly one that involves family both in and out of a business. Families of all shapes and sizes across the wealth spectrum can be tricky, add a major business that has impacts on employees and communities, and things are even more complicated.

Working with wealthy families and entrepreneurs is an everyday occurrence for UBS’s financial advisors and some of the key learnings that we’ve seen are all about transparency, thinking ahead, and working with a fulsome team who can help understand and target the family’s goals.

  • Identify and develop successors and their skills because it is essential to an organization’s long-term survival. For the Roys, the drama begins when Logan is medically incapacitated, and a power vacuum becomes evident, and individuals grasp on to power. Businesses should have documented plans in place for unexpected leadership transitions and to have prepared individuals well in advance with proper mentoring and professional development. When identifying long-term successors, consider abilities, business acumen, and alignment to the company’s mission and culture. It’s important to note, succession doesn’t have to mean the business owner is immediately giving up control. Working with a good set of advisors can identify this goal and plan for it by implementing plans over time and with differing voting classes of stock, for example. You can, and should, consider your personal estate and your business plans in the context of each other rather than separately.

  • Communication is Key. When building a succession plan for the family business, it's important for all family members to be clear on expectations and accompanying roles & responsibilities. Many families work with their financial advisors and other independent, neutral parties to help facilitate family meetings where the goals, opportunities and challenges are put on the table. Start small first when planning with your advisors and then integrate all the key players, especially if there’s a chance things could get fiery.

  • Differentiate “fair” versus “equal,” especially when members may be both in and out of the business or with differing levels of responsibility. Splitting shares of the company equally may cause challenges in the future as those in and out of the business have differing goals. By getting things out on the table and working with your advisors on a strong estate plan, there are ways to accomplish treating your heirs fairly and in a way that can allow the business to sustain itself.

Will Succession end in a way where the Roy family has put aside their petty differences and can come together in love and harmony? Probably not, but the good news is that most families aren’t the Roy’s. In the meantime, let’s enjoy these final episodes as an escape from reality, laugh at Cousin Greg, yet also a warning about what’s at stake for family businesses. And in your next family meeting, don’t play “boar on the floor,” please.

Main contributor: James Jack, Head Business Owners & Multigen

Visit UBS Business Services and UBS Multigenerational Wealth for more info on business and family succession planning and insights on how to Share It Well .

Expiration: 3/31/2024

Review Code: IS2301771

Approval date: 3/16/2023