Family-owned businesses can borrow tips from the House of Windsor

Founders can communicate their succession plan early so that they can also manage any conflicts and resistance. PHOTO | SHUTTERSTOCK

Kenya has had an interesting relationship with the British royal family. It is on the slopes of Mt Kenya that Queen Elizabeth is reputed to have gone up the tree house as a princess and down the next morning as a Queen, after her father’s death. It is in Kenya, that Prince William proposed to Princess Kate. And Kenya is the first commonwealth country that King Charles visited as a king.

The British royal family adopted the name the House Of Windsor in 1917. Prince Philip- King Charles' father died a few years ago and not long after, King Charles' mother, Queen Elizabeth also died. Despite the deaths of the patriarch and matriarch, the succession and inheritance to the throne was very seamless.

Kenyan family-owned businesses can learn a few tips from the British royal family on how to plan for corporate succession. It is sad to watch leading family-owned businesses going down the drain after the founders retire. In Kenya, there are very few family-owned businesses which make it to the third generation.

Many of them disintegrate at the second generation after the founders' exit. Issues like sibling rivalry, succession battles and lack of proper mentorship are to blame.

What can a family-owned business learn from the House of Windsor on corporate succession?

The House Of Windsor has a predictable succession plan. It is general knowledge who will inherit the throne even while the king or queen is on the throne. The royal family has 23 named successors in order of affinity, such that if one is not available then the next in line takes over. The 23 heirs know the order of affinity and the roles in so far as succession is concerned. It is very difficult for a founder of a family business to name an heir as this may have a negative effect and cause a lot of strife.

The leaf that founders can borrow from the House Of Windsor, is to name their heirs and set out their roles. The founder ought to clearly define the roles of each of the heirs and if possible, document this. This will have an effect of bringing clarity in so far as the role of each heir is concerned.

The British royal family succession to the throne is a Parliament affair. The succession affairs and the order to the throne is a law passed in Parliament. The wisdom founders can get from this, is to involve other stakeholders in corporate succession.

If the business has a board of directors, then it is good for the founder to involve them in the succession plan. The board of directors can be made aware of the founder’s corporate succession plan.

The heirs to the throne are trained from childhood on matters pertaining to the royal family. They also follow very strict rules that align with the objectives of the House Of Windsor.

The lesson for founders is to begin training and grooming their heirs early enough so that at the time of retirement, they are well prepared to take up leadership roles within the family business.

Founders can communicate their succession plan early so that they can also manage any conflicts and resistance that may arise from their wishes.

Ms Mputhia is the founder of C Mputhia Advocates | [email protected]

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.