Family businesses 'won't pass to next generation'

The heads of nearly half of all family-owned businesses in the UK do not plan to pass on the running of their company to the next generation when they retire, research claimed today.

Around 48% of people who run a family firm said they did not think the business would continue to be owned or run by the next generation, it was reported.

Just over a quarter of people thought the family would retain ownership of the firm but not be responsible for its day-to-day running, while 15% of those questioned were unsure whether their family would have any involvement.

The research, which was carried out by JP Morgan Private Bank and questioned more than 47 of the UK’s largest family-run businesses, was published in the Financial Times today.

Nigel Nicholson, professor of organisational behaviour at the London Business School who compiled the research, said: “I have spoken to people who have said they wouldn’t dream of getting their family involved.

“It is not all that attractive to be involved in the family business because there is not a strong family culture in the UK.”

The Financial Times said British government figures showed that around two thirds of all public and private companies described themselves as being family-owned, and they accounted for around half of private sector economic activity and employment.

It said many of the businesses were formed after the Second World War by returning soldiers and were now being run by the third generation.

Mark Evans, a senior executive at JP Morgan Private Bank, said: “To remain successful, it is vital that family-owned businesses address management succession and family involvement issues together, and earlier rather than later.”