 "Montford (L) and McCool")
How best can family owned-controlled businesses address the complexities inherent in addressing succession issues?
Succession planning for family-owned or family-controlled entities requires a special level of proactivity regarding the identification and evaluation of potential successors to key, highly visible roles in the enterprise. Succession planning for the family business can be a particularly tricky process. A trusted outside advisor is essential to engage all parties and build the trust required to share objective counsel regarding the unique variables any family business will face as it considers how to entrust it into the most capable hands. They are much more dependable to give credible advice and resist the temptation to tell the board and leadership only what they want to hear.
How important is communication in resolving internal conflicts?
Depending on how the corporation is structured, in most cases the board always has the final authority to override the management’s position in the case of conflicts. That being said, the board must be a part of the solution and not just a part of the problem. A constructive dialogue, reinforced by good leadership, should be productive before any conflicts become publicly aired. Otherwise, neither advocate is doing the company any favours. If a conflict persists, it may be time for a change in management or if an impasse exists and a board becomes intractable, some director retirement receptions may be in order. Ultimately, in the instance of conflicts, principled leadership is the cure for resolving difficult conflicts.
How best can a professionally nominated CEO move out of her predecessor’s shadow while handling legacy issues?
The best way for a new CEO to move out of his or her predecessor’s shadow is to set the new agenda and announce, after careful diligence, what policy changes are to occur “upfront” so that there will be no surprises to the management or the board when the new positions or policies are instituted. This accomplishes two important things. First, the board can object or intercede if it feels the departures from legacy practices are too extreme or not in the company’s best interests. Second, it gives the management a clearer view of expectations and goals so that within the company they can make whatever adjustments are necessary in its operating and strategic plans to ensure successful implementation. Regardless of a predecessor’s strengths or intended new policies, the new CEO should carefully sound out the senior management, the employees and certainly the board of directors before formulating his or her plan of action. Otherwise, the ball has been fumbled on good succession planning!
