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ENTR 3P98 (6)
Chapter 5

Chapter 5

3 Pages
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Department
Entrepreneurship
Course Code
ENTR 3P98
Professor
Teresa Menzies

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Description
CHAPTER 5Succession and the Transfer of PowerThe Ultimate ChallengeA healthy businessA healthy familyThat will continue from generation to generationThe CEO as Architect of Governance Blurred system boundaries present the strongest case for the need to build institutions to govern the relationships among family ownership and management of the businessUnfortunately the critical and urgent need to build institutions of governance is often lost on the CEOWhat Kinds of Governing Institutions do CEOs Need to Build Research on best practices indicates that all of the following canplay a role in improving the familymanagementshareholder interaction A board of directorsadvisory board A family council A family assembly An annual shareholders meeting A management team that includes a number of topnotch nonfamily managersOnly after constructing an infrastructure founded on these governing institutions can the CEO architect confidently proceed with his or her plan to transfer power to the next generationThe Transfer of PowerCEOs must be the architects of the transition Transfer of power can be problematic when o CEOs dont want to leave o CEOs fail to prepare nextgeneration members for leadership o Succession is triggered by illness or death of CEO Transfer of power must be uniquely designed for each family and businessSuccession and ContinuityRequires the CEO to be committed to the company rather than to their own agenda Must enlist the right people and then execute the right strategies to ensure both sustainability and continuity oRight people
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