You have successfully transitioned the ownership from the founder to the next generation. Relationships within the ownership group of parents and siblings are strong. You know each other well and respect each other’s different personalities and strengths. Everything feels settled and in balance…
But time passes, and gradually, the third generation grows up and grows ready to step into the ownership. Questions start to surface about finances, inheritance and responsibility. You look around the table and begin to wonder how you will make room for everyone.
As more people join the ownership group…
…new questions follow. For example:
- If there is not room for everybody on the board, how do you decide who gets a seat?
- What are the criteria for stepping onto the board? Is everyone welcome, or should it depend on specific skills and experience?
- Should ownership remain shared, or be divided into family branches? And is that even practical if you share a business, family office or long-term investments?
- How do you talk to your children about inheritance, legacy and wealth in a way that encourages a shared understanding?
- How do you ensure that family members act responsibly as owners? For example, is it acceptable to comment on your nieces’ or nephews’ behaviour or spending?
- Is your organisation, whether a family office, holding, foundation or operating business, ready to support a larger and more diverse group of owners?
- Should the next generation be educated together for the ownership? If so, can you agree on how big a role it should play in their lives?
- How does your financial situation change as the group grows, and what does that mean for your investment strategy?
- Can you define the different roles within the ownership structure? And how each person can contribute?
The transition from one or a few owners to a larger group of owners is a turning point, as relationships and expectations change. This is when more difficult conversations follow, and with them, the risk of conflict. People are naturally sensitive when it comes to their own children, particularly in a setting where readiness, capability and behaviour are put under scrutiny.
A next-generation strategy brings clarity and direction
A next-generation strategy is a powerful way to help families create clarity before complexity becomes overwhelming. It is not the aim to set the future in stone, but to create a shared understanding for the ownership as the family grows.
At Harbour, we would bring together one or two generations of current owners in a structured process to work through these questions. While much of the discussion revolves around the future, the process also offers a chance to assess how ownership works today and strengthen it before the next generation comes in the door.
Are you considering how things will work out when your nieces and nephews will be owners alongside your own children? Get in touch for a confidential conversation about how to handle these discussions in a constructive and long-term way.
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