Most corporate dynasties fail to make it to a second generation, making these Canadian firms thriving under the leadership of the founder’s grandkids (and great-grandkids!) truly remarkable
Izzy Asper never wanted his children to work at Canwest Global Communications, the now defunct media empire he founded. His drive and hunger for acquisitions turned Canwest into one of the most powerful firms in Canada and, for a time, earned the Aspers a spot on the Rich 100. He wanted his kids to succeed elsewhere, however.
“They were all practising lawyers and were doing very nicely on their own. It was they who got this dynastic glaze in their eyes—which I generally discouraged,” he told journalist Peter C. Newman. “I don’t believe in dynasties.” But his daughter, Gail, “slipped through the net” to become general counsel at Canwest, and brothers David and Leonard followed. It was under Leonard’s stewardship that Canwest filed for bankruptcy in 2009. Read more
67% are at Risk of Succession Failure
If you are an owner in a family enterprise, the chances of your business transitioning successfully to the next generations is not very good. This has not changed over the years. Statistics show a failure rate of:
- 67% of businesses fail to succeed into the second generation
- 90% fail by the third generation
With 80% to 90% of all enterprises in North America being family owned, it is important to address the reasons why transition is difficult. Read more
Most parents feel strongly about ensuring that their children are treated equally in their will. For many, this is a moral obligation, and, on the surface that would seem easy to accommodate. Often, however, this is not the case. Most estates are not totally liquid at the death of the testator and some assets are harder to divide than others. This is particularly true when a family business is involved, especially when many business owners have up to 80% or more of their wealth tied up in the family enterprise.
Most business partnerships start with the best intentions, but not every partnership ends that way. That’s why buy-sell agreements are so important. A buy-sell agreement is a contract between business partners that dictates who can buy a departing partner’s share of the business and establishes a fair price for the partner’s stake. The agreement also describes how to determine a company’s value if all the owners decide to sell. Read more