Succeeding at Succession
CFERF Research Report Findings Trigger a Call to Action for Private Business Owners in Canada
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 10/18/11 -- Only forty percent of Canadian private companies have a clear business ownership succession plan in place, which could leave them unprepared and at risk in the event of unforeseen circumstances. This and other findings appear in a study prepared by the Canadian Financial Executives Research Foundation (CFERF), entitled Private company succession planning: Where do you stand? The research is sponsored by Grant Thornton LLP.
The results are a concern for a country that relies on small and medium-sized business to generate as much as half of its GDP, and is preparing for a significant shift as baby boomers retire and a new generation takes the reins of ownership in this vital area of the Canadian economy.
"The risks of companies not having succession plans in place are enormous, both for the economy and for the owners themselves," points out Michael Conway, Chief Executive and National President of FEI Canada. "In addition to putting the businesses at risk by alienating potential successors and buyers, owners may fail to realize the full value of their life's work. Families ties could be damaged and it may even be difficult to obtain long-term financing if lenders perceive there has been inadequate business planning."
As company owners age along with the rest of the population, many are finding they are ill-prepared for the inevitable transition that lies on the horizon. Reasons include: lack of foresight; owners who refuse to let go; limited resources; and struggles to either manage growth or simply survive.
The research is based on a survey of more than 100 financial executives conducted in July 2011 by CFERF, the research arm of Financial Executives International Canada (FEI Canada). The survey was complemented with insights gathered via an executive research forum held simultaneously in Toronto and Vancouver. Private company succession planning: Where do you stand? was released today in Vancouver as part of an FEI Canada breakfast seminar series, also sponsored by Grant Thornton LLP.
"The study also points to specific challenges for family run businesses, which employ half of the survey respondents," adds John Harris, a partner in the Vancouver office of Grant Thornton LLP and National Leader of the firm's Privately Held Business practice. "In many cases, business owners hope their children will take over their companies, but it appears that this may be an unrealistic expectation. While the majority of family businesses had appointed designated successors, some of those had not gone through any training or education programs to prepare them for their future responsibilities."
The survey also revealed:
Private businesses face an uphill battle regarding ownership transition, which could translate into a large number of businesses that may be negatively impacted. Some of this potential for turmoil might be avoided or at least minimized by following some best practices, such as:
CFOs are well-suited to turn the company leadership's attention to this kind of long-term planning. Succession planning is one way of forcing owners to cast their sights on the future of the organization and to look at the steps needed to get there.
Please to view the full report Private company succession planning: Where do you stand? The FEI Canada breakfast seminar series will also be held in Toronto (Oct. 24), Calgary (Oct. 24), Halifax (Oct. 25), Edmonton (Oct. 26) and Montreal (Oct. 27). for more details.
The Canadian Financial Executives Research Foundation (CFERF) is the non-profit research institute of Financial Executives International Canada (FEI Canada). The foundation's mandate is to advance the profession and practices of financial management through research. CFERF undertakes objective research projects relevant to the needs of Canada's senior financial executives in working toward the advancement of corporate efficiency in Canada.
Financial Executives International Canada (FEI Canada) is the all industry professional membership association for senior financial executives. With eleven chapters across Canada and more than 2,000 members, FEI Canada provides professional development, thought leadership and advocacy services to its members. The association membership, which consists of Chief Financial Officers, Audit Committee Directors and senior executives in the Finance, Controller, Treasury and Taxation functions, represents a significant number of Canada's leading and most influential corporations.
About Grant Thornton LLP
Grant Thornton LLP is a leading Canadian accounting and advisory firm providing audit, tax and advisory services to private and public organizations. Together with the Quebec firm Raymond Chabot Grant Thornton LLP, Grant Thornton in Canada has approximately 4,000 people in offices across Canada. Grant Thornton LLP is a Canadian member of Grant Thornton International Ltd, whose member firms operate in close to 100 countries worldwide.
Contacts:
FEI Canada/CFERF
Christian Bellavance
VP Research and Communications
416-366-3007, ext. 5114
Grant Thornton LLP
Tania Freedman
Senior Manager, Media Relations
416-607-2745
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Datum: 18.10.2011 - 12:00 Uhr
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News-ID 77197
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