Andrew Bathgate is a partner specialising in family business and succession at accountancy and business advisory firm BDO.
What are some of the trends you're seeing in terms of family succession in New Zealand, and what do you think are driving those?
The 'leadership' generation is staying in the family business for longer. That's being driven by a lack of succession planning and the simple fact that people are living longer and are also more active as they grow older. The downside of this is that often talking about succession is left too late and younger family members can have established a career independent of the business and don't have any desire to step into the family firm. But staying in the business for longer doesn't need to be a negative; I've actually seen it can be the opposite when it's managed properly.
We've seen situations where the older generation has been able to successfully transition into a mentoring role, but for that to happen there needs to have been an active and conscious effort by the family to address succession a lot earlier.
Some of the larger family businesses we've been involved with have looked to private equity firms to provide a form of succession whereby the business is sold. This can then create other issues with the family wealth now being held in a family trust for the benefit of the trust's beneficiaries, and the trustees are then left with the responsibility of managing and investing a large amount of wealth.