Most entrepreneurs know that they will one day step back from their business, and many have been thinking about it for years. Yet the conversation about what happens next keeps getting postponed. The problem is rarely a lack of a suitable successor or a watertight financial plan, but something less visible: how ownership, roles and decision-making are arranged within the family.

Femke Storm and Ron Nap, founders of Boardtrust, explain how people, management and governance together determine whether a handover goes smoothly or drags on for years. The company guides owner-managers and family businesses through succession and ownership transfer, from ownership and structure to leadership and family dynamics.

A process of years, not a single moment

In practice, Boardtrust sees that succession is rarely a surprise, but is almost always tackled seriously too late. Entrepreneurs know they will eventually stop, and often have been thinking about it for years. Yet the core questions remain unanswered longest: who will make the decisions, who owns the business, and what role will each family member have.

It is only when the pressure builds, whether through age, health or a concrete trigger such as an acquisition enquiry, that it becomes clear how much has still not been settled. It often turns out that the bottleneck is not a lack of a suitable successor or a solid financial plan, but the absence of clear agreements about ownership and roles.

When roles become blurred

In practice, most conflicts arise not from unwillingness but from a lack of clarity, Boardtrust observes. Family, ownership and business form three systems that constantly overlap in a family business, and whenever someone makes decisions from one role that actually belong to another, what Boardtrust calls "role confusion" arises. Think of an owner's partner who has a say in staffing matters outside her formal role, a former director who still determines dividend policy after stepping down, or a family barbecue that quietly turns into a shareholders' meeting.

To those involved, it feels entirely logical. From a systemic point of view, it is not, and it is precisely this kind of ambiguity that comes back to bite the business years later, at the point when it actually needs to be handed over.

"Governance is often confused with bureaucracy, but it is quite the opposite. Clear structures give a family the freedom and peace of mind to make decisions faster and with more confidence."
— Femke Storm, co-founder of Boardtrust

Structure is not bureaucracy

According to Boardtrust, the solution does not lie in a 300-page rulebook, but in practical organisational housekeeping: who decides what, which agreements have been set down and which have not, and how a successor is prepared step by step rather than thrown in at the deep end. The approach follows from what the business and the family need, not the other way round: sometimes succession within the family is the obvious route, sometimes external management is the better path, and sometimes it is a combination of both.

That structure is not an end in itself. As Boardtrust puts it: structure creates freedom and peace of mind. Its absence, unfortunately, regularly escalates into more than just a family disagreement.

New management, old culture

Governance is not just about the family, but also about who actually runs the business. Many family businesses rely for a long time on the knowledge and network of one person, which makes them vulnerable the moment that person steps back. A professional management team, with clear responsibilities and talent from both inside and outside the family, allows the business to grow autonomously, without that dependency.

This also has an aspect that reaches beyond the family itself. A business with professional management and governance in order is demonstrably more attractive to investors, partners and potential buyers, because it is precisely this kind of ambiguity that gets exposed first during an acquisition or investment process.

"A professionally organised management team doesn't just make a business stronger for the next generation, it also makes it demonstrably more attractive to investors and buyers."
— Ron Nap, co-founder of Boardtrust

Preparing the business for its next phase of success regularly means, in practice, that succession does not come from within the family but from outside: an external board member who complements the existing (family) management team, or in some cases even replaces it. A next step is often the establishment of a supervisory board or advisory board, which formalises oversight and sparring as well. Boardtrust also guides this executive search process, often following on from earlier advice and assessments, from search through to appointment.

Ready for the next step

Not every family business that has its structure in order is heading towards a sale; for many owners, handing the business down within the family remains the starting point. For those considering an external step, such as a management buy-out, a buy-in or a sale to a strategic party, the same principle applies: the better matters are arranged internally, the wider the field of buyers and investors becomes.

That is also where platforms such as Dealsuite come into the picture: a market network that connects buyers, sellers, private equity funds and advisers directly with one another across Europe, rather than being limited to one advisor's personal network. For a family business with its structure in order, that means being able to explore the market itself as soon as the family is ready, instead of waiting for the right buyer to happen to come along. Boardtrust is active there too, not to find buyers or investors, but to make sure that questions around leadership, succession and governance that arise during such a process don't get left unaddressed.

"Dealsuite puts us directly in touch with owner-directors and family businesses who have questions about the next phase of growth, or about a management or supervisory position that needs to be filled."
— Ron Nap, co-founder of Boardtrust

Staying in control, even after the handover

Ultimately, it comes down to staying in control of the future. Anyone who settles ownership, roles and succession while things are calm does not have to negotiate them at the moment things get tense. The business keeps its course; the change of leadership fits within it. Structure creates freedom, including at the moment it matters most.

Want to know how Boardtrust can help arrange governance and succession in your DGA or family business? Get in touch with the team.

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