SUCCESSION POLICY
Back to GlossaryDefinition
Typically addresses leadership succession and the process whereby the family leader may step aside (down) to an emeritus role prior to retirement. In other cases, family may have leadership policies for shadow leadership with the incumbent prior to transitioning authority/control, or in other cases, families may institute bridging leadership policies, when they may be seeking transition leadership or agency-leadership or non-family during periods when family members are being groomed or trained up.
Summary
A succession policy is a formal plan that family businesses create to manage the transition of leadership from one generation to the next. It outlines different pathways for leadership change, including gradual transitions where current leaders move to advisory roles (emeritus), mentorship periods where successors work alongside current leaders (shadow leadership), or temporary external leadership while family members develop necessary skills (bridging leadership). This policy helps ensure business continuity and reduces conflicts during leadership changes.
Usage Context
Critical when studying family business governance, leadership transitions, and long-term business sustainability strategies
Common Confusions
- Thinking succession policy only applies when the leader retires completely
- Confusing succession planning with estate planning
- Believing succession policies are only for large family businesses
- Assuming succession always means passing control to the next generation immediately
- Mixing up the different types of transitional leadership roles
