Family businesses are stronger on governance, weaker on succession readiness

A new 30-year study from The Family Business Consulting Group and Plante Moran finds family enterprises have improved their governance and planning, but many still have not named a successor. The results show a shift from outside threats toward internal family readiness, especially education, communication and expectations around ownership.

Why it matters: - Family businesses are increasingly focused on whether the next generation is ready to own, govern and lead responsibly. - The study suggests stronger structures are not enough by themselves to secure continuity. - Succession depends as much on family preparation as on financial and legal planning.

What happened: - The Family Business Consulting Group and Plante Moran released a 30-year study comparing current family businesses with survey data from 1995 and 1997. - The study looked at what has changed, what has improved and what remains unresolved in family enterprise planning. - The results were released Oct. 14, 2026.

The details: - Education of family members was the most frequently cited challenge to future growth and survival, at 49%. - Concerns about preventing entitlement ranked second, at 44%. - Labor costs remained a major concern at 41%. - Increasing competition followed at 39%. - In 1995, the leading concerns were increasing competition at 47%, regulatory burdens at 40%, labor costs at 30% and a lack of qualified workers at 29%. - Slightly more than one-quarter of 1995 respondents listed business succession planning among their top three concerns. - Family education and entitlement were not answer choices in the 1995 survey. - FBCG and Plante Moran added those topics to the 2025 questionnaire based on observations from their work with family enterprises. - Respondents ranked family education and entitlement first and second. - The survey measures concern about entitlement, not proof that younger family members are more entitled than earlier generations. - The study says entitlement usually reflects unclear expectations rather than character. - Families reported practices that can address those concerns, including family education, employment policies and market-based compensation. - Fewer families have named a successor today than in 1997, with 35% doing so in 2025 versus 44% in 1997. - Ninety-five percent of family business owners expect revenue growth over the next five years. - Ninety-five percent also expect the business to remain under family control over the same period. - Plante Moran said it helps families navigate tax, estate, valuation, liquidity and ownership structures that support transition. - FBCG said governance is the system families use to create clarity, make decisions, set expectations and stay aligned as ownership and leadership change.

Between the lines: - The shift in priorities shows family owners are thinking less about outside pressure alone and more about internal readiness. - Younger family members may already be learning about family wealth and business through classmates, social media or online searches before parents address those issues directly. - That reality makes early, age-appropriate education more important than waiting for a transfer event. - The drop in named successors suggests formal planning has improved, but the human side of continuity still lags. - The study implies that succession failures often stem from communication gaps, not just missing documents.

What's next: - Families are being pushed to start succession and continuity conversations earlier than many expect. - Education can cover business history, values, ownership, family employment, financial literacy, governance and responsibility. - As family members mature, those conversations can expand to help them participate without assuming every relative will work in the business or lead it. - FBCG and Plante Moran both point to clearer expectations and stronger communication as the next step for durable transitions.

The bottom line: - Family businesses have gotten better at building structure. - The harder challenge now is preparing people for what ownership actually requires.