How do I choose a successor from among my children?

Once you have decided that the business will stay in the family, the harder question appears: which child? It touches fairness, affection and the business all at once, so it helps to bring structure to it. A written process protects the relationships as much as it protects the company.

Start with the job, not the person

Write down what the next leader must actually do. Think about managing people, dealing with customers and suppliers, reading the financial statements and making decisions under pressure. Then measure each child against that list. Birth order, loyalty and who is most like you are poor guides. Some children may not want the role at all, and it is better to learn that early and without hurt.

Let each one show capability

Give each interested child real responsibility, over a real period, with real results to look at. Outside experience helps too, because it shows what they can do without the family name behind them. Judge on what you observe, and invite the opinions of senior staff who see them at work.

Use a neutral voice

A trusted outside adviser or a small advisory board can assess candidates without the weight of being a parent. They can ask hard questions and give each child a fair hearing. The decision remains yours, but you will have more confidence in it, and the children may find it easier to accept.

Tell the others early and plainly

Children who are not chosen should hear it from you, directly, with reasons, before rumours reach them. Say what role, if any, they will have. Questions about ownership shares, fairness in the estate and the tax effects belong with your accountant and lawyer. For the earlier question of whether to keep the business in the family at all, see should I pass my business to my children.