Although family corporations are entering a full-fledged period of generational change, an analysis found that the success rate of succession remains at about 30%. Observers said it is necessary to identify succession risks in advance—such as perception gaps between the manager and the successor—and to prepare an objective, data-based succession strategy to raise the success rate.
The Korea Federation of Small and Medium Enterprises corporate succession activation committee said it co-hosted a forum on the 27th with the Family Business Association titled "The power of challenges that bridge generations, corporate succession master plan strategy."
Kim Sun-hwa, head of the Korea Family Corporations Institute, took the podium as the keynote presenter and presented "An integrated succession strategy for successful succession of family corporations."
Kim said, "Family corporations are entering a full-fledged period of generational change, but the success rate of succession remains at about 30%," and noted, "If even one element of corporate succession—management, family relations, or ownership structure—is not prepared, it can pose fatal risks to the continuity of corporations, such as management vacuums, conflicts, and dispersion of equity."
In particular, Kim emphasized, "For smooth corporate succession, it is necessary to use a 'succession readiness diagnostic tool' such as SMD (Succession MasterPlan Diagnostic) to identify succession risks, including perception gaps between the manager and the successor, and to prepare an objective, data-based succession strategy."
Kim So-hee, chair of the Korea Family Business Succession Corporations Council, who is a Commissioner of the corporate succession activation committee and a second-generation businessperson about to assume succession, joined as a panel discussant and said, "Corporate succession entails simultaneous, complex changes in corporate culture, management systems, leadership, and family relations, so without an integrated strategy, sustainable succession cannot be guaranteed."
Kim added an alternative, saying, "Successful corporate succession requires not only tax policy and education for successors, but also the active advance preparation of the parties involved in succession and a long-term succession roadmap, and improvements to payment systems must support easing the burden of tax financing that inevitably arises during succession."
Yun Byung-seop, chair of the Family Business Association, which co-hosted the forum that day, said, "A comprehensive legal framework to support corporate succession must be established so family corporations can pursue the dream of becoming long-lived corporations, and government support must also back the formation of a virtuous cycle that links academic research with industry experience."
Following the morning forum session that day, the Family Business Association's "academic paper presentation session" was held in the afternoon. The association's research team, consisting of on-site businesspeople and corporate succession experts, presented and shared several in-depth papers, including: ▲ case studies on using family business succession support systems ▲ methods and case studies of family business succession in small manufacturing and the mold industry ▲ succession strategies for intellectual property rights of family corporations.