Australia, in particular Victoria and South Australia, has a relatively high proportion of family businesses in the third generation and beyond who seem unprepared to face transition and exit.
As per a recent survey conducted by KPMG and the University of Adelaide, family businesses in Australia appear to be ill prepared for exit/ succession. 76% of the firms in the survey expect to appoint a new CEO in the next 5 years and 60% of these firms intend to pass on the leadership to a family member. However 55% of those passing on leadership in the next 2 to 3 years do not believe the successor is ready. Moreover only 9% of the firms have a retirement plan for the current CEO/MD. Only 14% of the firms are actively preparing and training a successor and only 12% have a process in place for appointing new CEO/ MD. The survey was conducted among 1700 family businesses with median age of 37 years and median sales revenue in between $10 to $20 million. The majority of respondents were controlled by second generation or later.
Succession planning is probably the greatest challenge facing the retiring baby boomer generation. A colossal transfer of wealth and business control has already begun, and the pace will increase over the next 10 years. But the level of preparation amongst families in business is close to abysmal.
Source: Family Business United