Irish businesses not so good at keeping it in the family
Cantillon: PwC report shows just 18% of Irish family firms have a formal succession plan
Centra’s store in Terenure, Dublin, part of the family-owned Musgrave Group. Irish family companies need to ask why so few of them prepare properly for transferring their enterprise to the next generation. Photograph: Dara Mac Dónaill/The Irish Times
PwC’s family business report began as a strictly local affair, something that the accountancy firm’s Irish arm conceived and produced itself. But headquarters took up the idea and now it is one that the practice produces right across the globe.
Today, PWC will publish reports on family businesses across 53 different territories, based on responses from 2,900 executives of such companies. The firm sees them as an important market – and with good reason.
In Ireland, family companies include everything from your local Centra to suit maker Magee. That pattern is repeated in some shape or form everywhere. If these organisations do not actually make up the backbone of most countries’ economies, they account for quite a few of its vertebrae.
Not only that, they are in it for the long haul in an almost unique way. Commenting on this year’s report, John Dillon, a partner in PwC’s Dublin office, noted that some thriving family businesses would possibly not be here had they been forced to operate like listed companies, focusing mainly on quarter- by-quarter gains .
So, with that durability in mind, Irish family companies, successful as many of them are, need to ask why so few of them prepare properly for transferring their enterprise to the next generation.
This continues to pose a real risk to the “family” in family business
While more than half of them want to do this, according to PwC’s figures, 18 per cent, fewer than one fifth, appear to have an actual, formal succession plan in place. Many have “a plan” but have not written it down.
This is a recurring theme, one that the firm’s report has picked up before. However, it has shown little sign of changing. This continues to pose a real risk to the “family” in family business. In fact, handing a company on to the next generation is what sets these organisations apart.
It is ultimately the thing that ensures a small grocer expands over 140 years into a Musgrave Group or a part-time weaver becomes a Magee after six generations.