1、Private Capital PracticePassing the baton:Creating value through CEO succession at family businessesA thoughtful CEO succession plan in a family-owned business can both protect the familys vision and achieve institutional renewal.by Acha Leke,Avinash Goyal,and Chaitali Mukherjee with Supriya KamathF

2、ebruary 2026The actor artof CEO succession represents a major inflection point for family-owned businesses(FOBs).Consider the case of a multibillion-dollar European family conglomerate that has effectively navigated five cycles of CEO succession in its 150 years.Its sixth-generation CEO describes th

3、e identification of successors(and their preparation for the role)as the single most important choice the business makes:“It has such a big impact.If it goes well,it has a huge positive impact.And if it goes badly,the impact can be equally negative.”Mismanaged succession at FOBs has far-reaching imp

4、lications given that these businesses generate more than 70 percent of global GDP and employ approximately 60 percent of the worldwide workforce.1 And there is much more at risk for FOBs beyond just erosion of shareholder value:The familys reputation and legacy are also on the line.When done well,ho

5、wever,CEO succession can both preserve the familys vision and catalyze institutional renewal.According to McKinsey research,FOBs consistently outperformed their non-family-owned counterparts,with returns to shareholders that were twice as high as those of non-FOBs from 2012 to 2022.2 Alongside other

6、 factors,the competitive edge of FOBs comes from their ability to consistently execute a long-term vision.Preserving that perspective across successive leadership transitions is a fundamental and complex challenge.CEO succession at FOBs defies one-size-fits-all solutions.Every family operates within