A family-owned group may be considering a new investment while preparing for a change in leadership. The same people can take part as owners, directors and executives, with different responsibilities in each role. The commercial plan needs to account for those responsibilities.
Start with the matter the business needs to resolve
An executive appointment and an investment in a business unit may be discussed together, but they require different contributions. Establish who can authorize each and whose views must be considered. This lets an owner express a preference without turning it into an operating instruction by default.
The distinction also helps examine disagreement. A concern about capital exposure can be addressed as an investment question, while a concern about the responsibilities of a successor can be considered in the role mandate.
Show the requirements of the businesses
A diversified group contains businesses with different capital needs and risk profiles. Their significance to the owners may also differ. A portfolio assessment should show the financial and strategic case for further investment alongside those ownership preferences.
Making the preferences explicit gives management something it can plan around. It also makes it possible to examine the capital committed to one business in relation to the needs of the rest of the group.
Authority has to move with the role
A successor needs decision authority, access to information and an understood relationship with the board. Review these responsibilities when developing the transition, including any approvals that will remain with the outgoing leadership.
Leave room for management to operate
Role mandates and review points give owners a way to assess the transition without taking over daily management. They should show what the new leadership is accountable for and when an issue requires an ownership or board discussion. Specialist legal and tax advice may be required alongside the organizational work.
The investment plan and succession plan need a shared account of who provides capital, who has authority and who will run the business.
General commercial information. Advice on a particular business, transaction or jurisdiction requires a separate assessment.