We see effective applications of both types everywhere. While Walmart andL’Oreal retain home command but have non-family members serving as CEOs, Victorinox and Beetel Corporation in the United States and Switzerland have family members serving as Directors.
The family’s established Tata Trusts in Asia still have control over the Tata Group in India, but the current chairman and CEO is not a member. In the meantime, Jaime Augusto Zobel de Ayala, the Ayala family in the Philippines, has been in charge of and serves as chairman of the eponymous group until August 2022, while his younger brother, Fernando Zobel de Ayala, serves as president and CEO. Instead of accelerating the rise of the next-generation family members, Ayala appointed Cezar P Consing, a long-time executive and non-family member, to replace him when Fernando resigned for health reasons.
SUCCESSION VERY RARELY GOES PERFECTLY
Succession planning is crucial for all businesses, but family businesses are often overlooked in particular. It demands careful consideration of unexpected events as well as the availability, suitability, and readiness of family members to take senior leadership positions.  ,
Even the best succession plans can fail. Things don’t always go as planned, whether it’s moving to professional management or continuing with family management.
Due to differences in governance and management style, a highly successful professional executive may not be successful in a family business.
After Ratan Tata endorsed him as his successor, Tata Group broke with tradition and appointed non-family member Cyrus Mistry as its deputy chairman of Tata Sons in 2011. Although Mistry assumed the chairmanship a year later, conflicts quickly broke out, and he was ousted in 2016 under extremely unfavorable circumstances, and Ratan Tata made a second appointment as interim chairman. Natarajan Chandrasekaran became the third non-Tata family member to lead Tata Sons in 2017.
A lack of effective succession planning can also have disastrous effects. Hanjin Shipping, South Korea’s best company, went bankrupt in 2017 after the second-generation heir passed away and his unprepared spouse became the head of Hanjin Shipping, which was named Korea’s Best Company in 2016.