The succession paradox – putting stewardship to the test

Successful succession is about more than transferring wealth: families need to prepare the next generation, establish effective governance and agree a shared purpose well before leadership changes hands. It is an ongoing process, not a one-off event.

Over the next generation, families could face one of the largest transfers of private wealth in modern history, but how can they ensure wealth is carried responsibly from one generation to the next? For some, the real challenge goes beyond the balance sheet alone.

Succession is often treated as a legal or technical exercise involving wills, trusts, corporate structures or family constitutions. These instruments are necessary, but they cannot cultivate trust, prepare heirs to lead or help a family agree on the purpose of their wealth and what long-term stewardship means. In my view, succession is better understood as an ongoing conversation.

What is the succession paradox?

Most families know succession matters; far fewer feel prepared for it. In a recent study by Deloitte, next generation readiness was the most cited obstacle to successful succession, identified by 35 percent of family business senior executives. Out of 1,587 surveyed, 32 percent said current leadership was “reluctant to relinquish control”¹.

Hesitation is a human trait, however. Founders may fear losing relevance, while successors might doubt they have what it takes. In cultures where respect for senior generations is especially valued, sensitive questions can be harder to raise. Everyone knows transition is inevitable, yet the most important conversations are sometimes postponed.

Families should not wait until the last minute – a crisis, incapacity or dispute. Under pressure, decisions may become reactive. Started early, succession could be shaped through openness and preparation.

Where conversations are difficult to begin, an experienced third party can sometimes help break the ice. Acting as a trusted intermediary is one way we aim to support families as they prepare for succession.

Understanding before ownership

Family wealth may span operating companies, private equity, real estate, lending, digital assets, trusts, foundations and family offices across several jurisdictions. It can be complex, and the next generation cannot safeguard what it does not understand.

Education should therefore be treated as succession infrastructure. Heirs need exposure not only to assets, but also to liquidity needs, leverage, governance expectations and reputational considerations. They should understand how financing decisions interact with long-term stewardship.

Governance before grievance

As a family grows – from a founder to children, siblings, cousins, in-laws and other potential beneficiaries – well-considered governance becomes increasingly essential.

Agreed frameworks can help address inevitable questions: who leads, who works in the business, how capital is allocated, how disputes might be resolved and how to define family contribution.

Family constitutions, charters and decision-making frameworks should not be seen as constraints. Done well, they can help set expectations before ambiguity hardens into grievance.

Purpose gives wealth a reason to endure

Another succession risk is a lack of shared purpose. Wealth without meaning can become fragile. Purpose may take the form of entrepreneurship, education, healthcare, conservation, philanthropy or community engagement. It gives future generations a practical basis for making choices together.

Younger family members may bring different priorities and skills, including an interest in technology, sustainability and social impact. Giving them legitimate ways to contribute could support cohesion. One may lead the business, another oversee diversification or philanthropy, and another pursue an independent career while remaining aligned with family values. The aim is not uniformity, I believe, but shared direction.

Preparation is key

For succession to succeed in practice, a gradual transition may be the way forward. Heirs should be given a seat at the table before they inherit it: observing meetings, shadowing decision-makers, joining investment reviews and spending time in the operating business, getting to know and understand it. Exposure could then develop into project ownership, committee roles and leadership responsibilities.

The families most likely to endure will not treat succession as a last-minute transfer of wealth and control. They will be prepared, speak openly, educate continuously and define a purpose strong enough to outlast any one individual.