HBO’s Succession Provides Important Lesson for Local Business Owners

By William Bragdon
Senior Vice President-Investments
The Parham, Arrowood, Bragdon Institutional Consulting Group
UBS Wealth Management USA

The fourth and final season of Succession continues to keep viewers on the edge of  their seats. The importance of strong succession planning for both the business and the family is evident if entrepreneurs hope to avoid the chaos that the Roy family sees.

Beyond the drama, the comedy, and the repeated calls to “clear the room,” Succession has brought the perils of succession planning, or lack thereof, into the spotlight. The show focuses on a powerful media conglomerate and the billionaire patriarch, Logan Roy, who is regularly pitting his children and company insiders against each other in a power struggle full of schemes, backstabbing and biting one-liners as they each hope to lead the company and the family into their next chapter.

While the drama of the Roy family is extreme and outlandish, it does serve a great purpose in highlighting the stakes of a good succession plan for a business, particularly one that involves family both in and out of a business. Families of all shapes and sizes across the wealth spectrum can be tricky. Add a major business that has impacts on employees and communities, and things are even more complicated.

For local business owners, transparency, thinking ahead, and working with a fulsome team who can help understand an organization’s goals are important items to focus on in succession planning. Here are other key items to focus on:

• Identify and develop successors while growing their skills: this is an essential part of an organization’s long-term survival. For the Roys, the drama begins when Logan is medically incapacitated, and a power vacuum becomes evident, and individuals grasp on to power. Businesses should have documented plans in place for unexpected leadership transitions and to have prepared individuals well in advance with proper mentoring and professional development. When identifying long-term successors, consider abilities, business acumen, and alignment to the company’s mission and culture. It’s important to note, succession doesn’t have to mean the business owner is immediately giving up control. Working with a good set of advisors can identify this goal and plan for it by implementing plans over time and with differing voting classes of stock, for example. You can, and should, consider your personal estate and your business plans in the context of each other rather than separately.
• Communication is important: when building a succession plan for the family business, it’s important for all family members to be clear on expectations, accompanying roles and responsibilities. Many families work with their financial advisors and other independent, neutral parties to help facilitate family meetings where the goals, opportunities and challenges are put on the table. Start small first when planning with your advisors and then integrate all the key players, especially if there’s a chance things could get fiery.
• Distinguish between “fair” versus “equal:” this is especially important when members may be both in and out of the business or with differing levels of responsibility. Splitting shares of the company equally may cause challenges in the future as those in and out of the business have differing goals. By getting things out on the table and working with your advisors on a strong estate plan, there are ways to accomplish treating your heirs fairly and in a way that can allow the business to sustain itself.

William Bragdon is a Senior Vice President-Investments at UBS Wealth Management USA. If you would like more insights for succession planning in 2023, he can be reached at [email protected]. Will and his wife attend and serve at Downtown Presbyterian Church in Greenville and are now the proud parents of four young children. Will enjoys golf, fly fishing, hunting and flying.

This article has been written and provided by UBS Financial Services Inc. for use by its Financial Advisors.

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