How family businesses can overcome egos and internal conflicts to find their next leader--and put a succession plan in place before it's too late.

Families that control an enterprise over multiple generations have a lot more to consider than the average business owner. Egon Zehnder's Jennifer Pendergast shares how families should approach selling their business.

At Egon Zehnder, we have worked with family businesses around the world since our founding in 1964. We interviewed scores of family executives to better understand their sources of success—as well as their pain points.

“Good governance is key to long-term success, especially in family-owned business, where stakeholder relationships are often complex,” says Sonny Iqbal, co-leader of Egon Zehnder’s Global Family Business Advisory.

Did you know that the majority (80 percent) of corporations around the world are family-owned? Yet only three percent continue operating beyond the fourth generation.

One of the fundamental challenges of any family business is maintaining the balance between “family” and “business.” Within the owning family, there will be the same complex, interpersonal dynamics and conflicting aspirations and priorities that occur in any other family.

There is hardly any major Chaebol in South Korea that has not been rocked by a ‘war of princes’ during leadership succession. Notably, the one group that should be involved that is kept in the dark from this is the professional management.

As third-generation succession begins at South Korea’s Chaebols, leadership succession is the most critical task the owner family faces.

In Emerging Markets Business, Egon Zehnder’s Sonny Iqbal and Richard Stark offered their perspective on one family business, Paraíso Verde, which was founded in Chile in 1911 and later fell into crisis following the loss of the founders.

Managing family relationships at work is one of the thorniest issues in family-owned businesses, particularly when relationships cross generations, such as parent-child or uncle/aunt-nephew/niece. Many family members are committed to professionalism and strive to separate “work” and “family” in their dealings with each other.