Implementation of a resilience assessment system for successions/transmissions of family owned businesses within the ERM framework

Abstract

In today's society, family businesses are the driving force of European economies. Long-term ambition, legacy and innovation are key words to describe them. When the time comes to hand over the business to the future owners, the thorny issue of transmission arises. This challenge leads too often to failure as 30% of family businesses come over the process according to the European Family Business Federation. Being aware of this problematic, Arkus Financial Services decided to tackle the issue of transmission, as well as succession in family owned businesses as part of the overall Enterprise Risk Management (ERM) framework. We attempt in the project-thesis to address the key obstacles that may jeopardize the transfer of the ownership and the transfer of the management and to fill this breach by developing a resilience assessment system focusing on enterprise-wide risks. The project-thesis begins with a review of the context in which the project is conducted. A description of the project management approach used is also discussed. Next, a literature review is performed. The aim of the literature review is to apprehend the dynamic between the family and the business, the challenges encountered by entrepreneurs during succession and transmission, the meaning of resilience, risk management, and the ERM methodology. Based on the literature review, we detail the steps necessary for the development and implementation of the resilience assessment system. The developed approach is formalized and implemented into calculation engines supported by a practical example. The conclusions of the thesis will be drawn through recommendations and the future perspectives of the project.