A C T ION P L ANS
The sudden or unexpected loss of a family business leader or heir can send shockwaves through a family business, so what are some of the practical steps families should consider?
KPMG’s UK head of family office services Catherine Grum gives some further steps families can take to ensure they have some of the basics in place for an unplanned event:
• Prepare a list of advisers to contact in an emergency, potentially including a PR or reputation expert who can be on hand to help shape any messaging in the event that the news could have adverse repercussions for the family and/or the business
• Establish communications—to inform the family, family office, and employees of the situation, ideally before they read about it in the press. Vet the statement if necessary by advisers first. It is good practice to have up-to-date contact details for each of those groups and a cascade list so that the process can be quick and well organised.
“Even if you already have a succession plan in place, you should review this periodically and give [it] a health check,” Grum says. “Have family circumstances changed, do they need to be updated due to changes in the law?”
“Everyone understands primogeniture,
they may not agree with it, because it may appear unfair to younger siblings, but at least they understand it and that is a good starting point to ensure that the constituent parts understand what is going to happen.” As a principal there should always be
a Plan B in place if anything happens, Kenyon-Rouvinez says. Who will lead, what will be the role of the board, what is the composition of the board and how will it work in practice in a crisis? She urged the involvement of senior management and the board in developing and practising the succession Plan B, instead of relying on a “secret envelope in a drawer”. Fleming’s advice to families all
depends on the groundwork that has already been done. “We would hope that with all the
“ ISSUE 73 | 2018 When that
happens and you do not have a plan in place and you do not have a leader, even if it is only an interim leader in place, people will feel that vacuum and then chaos will happen
families that we are lucky enough to work with, we have got good plans in place that recognise the legal and fiduciary responsibilities within the family, the inheritance and the tax- planning strategy, but on top of that, the family strategy,” he says. “It is a strategy you hope never gets
surprisingly enacted, but the reality is, that it often is. It is the advice we give before the disaster that is critical. Post-disaster, when your advice is reactive, it is much harder, a much more challenging set of circumstances and usually with [fewer] options.
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