Most family businesses plan carefully for the founder-to-sibling succession, but almost none plan carefully enough for what comes next: the move from sibling ownership to cousin ownership, which is often where family enterprises begin to unravel.
When siblings run a business together, they share a childhood. That shared history is both a strength and a crutch. Siblings know each other’s habits, rhythms, and fault lines. They’re better equipped to work together. But their shared history can bring to light past grudges and festering resentments.
Once cousins enter the picture, old informal systems can start to crack. Cousins are raised in different households. Their expectations on how to run the business may clash. Without the right governance structures in place, the family business might not last another generation.
This article breaks down what governance structures to put in place before the siblings to cousin transition arrives.
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