Turkish next-gens are placing greater importance on corporate governance and professionalisation of their family businesses than preceding generations, according to new research released today.
In total only 52% of family businesses in the country have a succession plan for the next generation, and only 23% have an estate plan, according to Turkish wealth builders: Family businesses cultivate economic growth, completed by Campden Wealth in conjunction with UBS.
This is despite the fact that only a fifth of family businesses are run by a professional manager rather than a family member.
However, the report said more established family businesses, those in the third and fourth generation, almost always had a corporate code implemented into their business.
The succession process was slow, according to the report, with the majority of businesses (37%) stating the transfer of the business from one generation to the next would take more than 10 years.
A further 25% said it would take six to 10 years, and the same proportion again said it would take three to five years. The remaining 13% said it would take less than three years.
The report noted the grooming of new leaders was often incidental, and younger family members often pushed for more structure in the family business as a result.
According to an investment adviser quoted in the report: “The third generation wants formal arrangements and protocols. They understand the changes brought about by globalisation and they are looking abroad for inspiration.”
Parental guidance and institutional education were perceived as the most effective way to train the next generation for a role in the family business.
“Externship” programmes, where young family members are sent to run small sections of the family business or work for another business in the same industry, were also a popular way to train the next generation.