Most large family businesses have a succession plan, but fewer than half describe it as broad and well-developed. Research published this year suggests that preparing someone to take charge involves more than deciding whose name goes on the office door.
A Deloitte Private report released in July found that 82% of surveyed businesses had some form of succession plan. Only 46% said their plans were broad and well-developed.
The findings cover 1,587 family businesses in 35 countries, supplemented by interviews with 30 senior executives. These were substantial companies, each with revenue of at least $100 million and family ownership of 51% or more. The survey took place between March and June 2025, so it is neither a September snapshot nor a survey of neighborhood family shops.
Readiness and control create different problems
Respondents identified three leading barriers: insufficient qualifications or experience among the next generation, cited by 35%; difficulty finding a suitable successor, at 33%; and current leaders’ reluctance to give up control, at 32%.
These problems can overlap. A prospective leader needs opportunities to make decisions and be accountable for results. Yet those opportunities depend partly on the current leader being willing to delegate. A written timetable cannot, by itself, resolve that tension.
For employees, unclear authority creates a practical question: whose decision counts? A successor may have the title while staff continue taking difficult issues to the predecessor. Suppliers, lenders and customers also need to know who can commit the company.
Family trust is different from managerial trust
A study published on August 28 in the Journal of Family Business Management examined this tension through interviews with five incumbent CEOs and six successors from seven Korean family firms.
Participants described two forms of trust: emotional trust rooted in family relationships, and managerial trust grounded in demonstrated competence. Their accounts suggested that both could coexist. Being trusted as a son or daughter did not automatically settle whether someone was trusted to run the business.
Four firms supplied interviews with both the outgoing leader and successor. Across those matched pairs, incumbents described actively cultivating trust, while successors tended to regard it as something inherited through family membership.
That mismatch offers a possible explanation for misunderstandings during a handover. One person may be waiting for evidence of readiness while the other believes confidence has already been established.
However, this was a small, exploratory study based on retrospective interviews. It did not track transitions over time or establish a rule for family businesses worldwide.
Ownership does not require the chief executive’s job
Deloitte’s full findings show that some families expect to separate ownership from executive leadership. Non-family CEOs led 13% of surveyed businesses, while 26% anticipated having one after succession. Those expectations are plans, not completed appointments.
The family can retain its shares and a role in overseeing the company while appointing someone else to manage daily operations. This widens the candidate pool, although it also requires clear boundaries between owners, directors and executives.
Preparation can begin before any vacancy arises. In the Deloitte research, 44% of businesses gave next-generation members formal roles with responsibility, 43% used job shadowing, and 40% required outside work experience before joining.
Such arrangements provide different kinds of learning. Watching an experienced executive reveals how decisions are made. Running a team or budget makes the prospective successor responsible for the consequences.
The handover also transfers knowledge
A 2025 review of 122 studies in the Scandinavian Journal of Management placed knowledge transfer and governance alongside succession planning among the main themes in the research.
That broadens what a useful transition plan needs to address. Beyond naming a successor, it can specify which decisions transfer first, how performance will be assessed and what role the departing leader will retain. It can also identify customer relationships, operating knowledge and responsibilities that would otherwise remain with one person.
A family may agree on who should inherit the business while still disagreeing about who should run it. Resolving those questions separately gives both the successor and the company a clearer basis for the next stage.
