In a recent article in The Globe and Mail, Beverley Smith recounts a rare tale of family business survival in which a Halifax seed company is still operating in the fourth generation.

In fact, it is reported that family business survival is a rare phenomenon in Canada with only about 30 percent of family-owned businesses surviving into the next generation. By the fourth generation, only three percent are still operating. Key lessons learned: avoid multiple decision makers and sibling dominated boards, get outside help (advisory boards, independent directors, competent executives, et cetera) and invest in governance and succession planning.

In my experience, I have seen many otherwise successful family businesses falter following the passing of the torch due to insufficient planning and communication and cumbersome ownership and management structures. I have also seen many successful family businesses flourish and grow when control is properly passed to the next generation. An important factor in those success stories was clearly identifying how the family business would be governed, who the key decision maker would be and hiring capable management to fill the gaps and bestow confidence on the non-management family shareholders.

It is also important to engage professional advisers with experience in this area in order to share best practices, provide an objective perspective and construct a functional ownership and governance structure. A modest upfront investment in succession planning will go a long way to creating an enduring legacy.