Roughly 90% of companies in Brazil are family-owned. They account for half of GDP and two thirds of formal jobs. And yet only 30% survive into the second generation — only 12% make it to the third. These numbers have barely changed over the last four decades.
The obvious question is: why?
The pattern that keeps repeating
The company grows under the direct leadership of the founder or the original partners. Decisions are fast, the culture is strong, team loyalty runs high. At a certain point — usually when the company grows past 40 to 80 employees — the first signs of strain appear: the founder becomes a bottleneck, children or relatives start taking positions without formal preparation, family conflicts begin to overlap with business decisions.
From there, two paths: the company structures itself, or it enters a silent decline.
Three fronts that need to evolve together
Ownership governance
A clear definition of roles among partners, rules for entry and exit, a shareholders' agreement, a dividend policy, and mechanisms for conflict resolution. This is not bureaucracy — it is the preservation of the value that has been built.
Family governance
Distinct from ownership governance. It addresses the relationship among family members as a family, not as shareholders. A family council, a family protocol, a policy on family members working in the company, a succession policy.
Corporate governance
The executive structure, an advisory board or board of directors, committees, performance indicators, management routines. Structuring this does not mean making the company rigid — it means giving the team (family or not) a clear map of how decisions are made.
The most frequent mistake: starting with succession
Many founders wait for "the time to think about succession" before starting to structure governance. That is like waiting for the fire to install the extinguisher.
Successful succession is the result — not the cause — of governance that was already mature years before the transition. Founders who plan their exit 5 to 8 years in advance are 3x more likely to keep the company healthy into the next generation.
Succession is not an event. It is a process that begins while the founder is still at the top of their game.
How SPCG works with family businesses
Our People & Organization practice includes a dedicated Family Governance service delivered in three phases:
- Maturity diagnostic — a map of the three governance fronts and identification of critical gaps.
- Structure design — collaborative construction of the shareholders' agreement, family protocol, and advisory board.
- Implementation and follow-through — 12 months of support for the operation of the new structures, with quarterly reviews.
If you are a partner, heir, or executive of a family business and recognize these symptoms, it is worth talking. Well-planned succession is the best value-preservation investment a family business can make.