Research of the Social and Demographic Changes Impact on Family Business Governance

The main objective of this research is to investigate the main problem of the family business – succession. It is an inevitable process of the management authority transfer from the one generation to another. This transfer is connected with the great risk for the company’s future prosperity. In spite of the well-known cases, when the company was becoming more successful from one generation to another, the global statistic shows less positive tendency of this family business development. Due to the transgenerational learning, the risk of the future failure might be reduced. The transgenerational learning is the process of the knowledge and skills transfer from the older generation to the younger one. In some companies, this process is formalized in a succession plan, which is used to attract receiver into business. The presence and features of the plan are influenced by the global social-demographic trends, for example, an increased life expectancy. The relation between social-demographic factors and succession and its influence on the company’s development was confirmed using the econometrics models on the STEP data 2018-2019. The results demonstrate the direct relation between the presence of the formal succession process and the average income growth. Moreover, the lack of the transfer number between generations means an income value increase. According to the results, the growth of the CEO age shows the positive effect on the probability of the succession plan presence. This fact may be explained by the growing alarm of the company future existence.