Harrington likens the three generations to


three sports—the golfer, the doubles tennis players and then the third-generation football team. “The football team needs to learn to play to each


other’s strengths and support each other,” she says. Indeed, it is the third generation that benefits


most from the governance strategies set out by the first and second generation. The idea is to create a story telling of the wealth creation, the vision of the founders as regards future success and purpose, a point of reference, and a glue to bind an extended family together. This only works, however, if there is involvement


and buy-in from all concerned. “It is so important to include the next generations


in these discussions and to see them as an empowered partner that need to gradually become more and more involved,” Holder says. “Engagement and being able to talk about things


ongoing advice and help. “The longer the delay, the longer it takes the next


generation to become fully up-to-speed,” Prior says. “Sometimes the better thing to do is retire, but


remain available for advice and to ensure that the governance is being followed. Trust and a thorough understanding of vision and values by all parties is key here.”


Think differently


But how formal does the process to underpin the education and the actual handover need to be? Harrington talks about the need for


‘hardware’: “An entrepreneur creating once- in-a-lifetime wealth might need to look at the vison for the future. [They may consider] how he or she wants it to be used for the good, to not be a burden on their children, and to not affect work ethics or lead to disputes between siblings. For this initial generation it is sometimes about getting the right structures in place so that the wealth is protected. This is the hardware.” By the time that wealth is passed down once


more though, a certain distance has been created and different family branches have different values, influences and priorities. It is at this stage that the Vanderbilt test kicks in and wealth is most likely to be lost.


allow for the embedding of a culture and thought process into the succession period. It gives common and agreed upon ‘tramlines’ for future generations to follow.” Prior agrees: “Succession is all about


relationships—family disharmony, a lack of communication, and having different expectations and perceptions of what is fair can all work against successful transition. This is all the more so once the generations expand and there are more people. This is where the wealth is lost.” “Systems work,” Prior concludes. “Having one that involves everyone means that a


family getting to the third or fourth generation and beyond has an embedded and consensual approach and culture. How that might look is as individual as the family. But having this common stewardship and behaviour creates an accepted family culture and this is what works.”


ISSUE 75 SUPPLEMENT | 2019


CAMPDENFB.COM


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