03/12/2008 - 22:00

Succession link missing

03/12/2008 - 22:00

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AN alarmingly high number of Western Australian businesses are currently operating without a succession plan in place, and with the baby-boomer generation on the verge of retirement, many enterprises could be at risk.

Succession link missing

AN alarmingly high number of Western Australian businesses are currently operating without a succession plan in place, and with the baby-boomer generation on the verge of retirement, many enterprises could be at risk.

In a recent KPMG private companies survey 83 per cent of respondents say they didn't have a succession plan in place.

The most alarming aspect of this, according to KPMG corporate finance partner Adrian Arundell, is that despite businesses being aware of the risk there seemed to be no action to remedy the situation.

"People weren't dealing with this issue...and we were highlighting to them that it was something they needed to deal with," Mr Arundell told WA Business News.

"For those who would be seeking to retire this year, they don't have a succession plan in place or the options for them getting out of their business, and the practical ability to get out of their business, is starkly in focus."

KPMG is comfortable with its own succession plan, which is constantly monitored and amended on a local, national and international level.

However, Mr Arundell noted an interesting phenomenon discovered during the survey.

"There seems to be a real rise in the daughters of the families taking over a real leadership role in the family business," he said.

One example is Emma Benney, the general manager at Ross Griffin Homes, a business her father started with partner Bruce Laan in 1997.

"The building industry is rife with kids taking over from their parents, it's a really typical model," Mrs Benney said.

Mrs Benney didn't intend to take over her father's business when she started accounting work nine years ago, but now she's not looking back.

"The generation before sort of broke that glass ceiling, but our generation was really the one that was almost expected to do the equivalent of our male counterparts," she said.

And it seems Mrs Benney may be setting a trend for the construction industry in the state.

Residential property developer JHW Group's managing director, Julian Walter, hopes his daughter, Alicia and his son, Jay, may combine their relevant expertise to eventually take over the business.

"It's a good mix I suppose because she's a fully qualified CPA with a legal degree, where Jay has done both his degrees in marketing and behavioural science," Mr Walter said.

Mr Arundell suggests detailing a contingency plan with defined periods of time for succession, and then engaging those people who have the potential to run the business.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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