Should Heirs Take Over the Family Business, or Should Professionals Be Appointed Instead?
Published by Ryan Gollan / 12 Feb 2025
An Unspoken Dilemma in Asian Families
I arrived in Sydney in the 90s, just as China’s economic miracle was taking off. In the decades that followed, I watched as a generation of first-gen entrepreneurs, self-made millionaires and billionaires built their wealth from scratch. Many of them had nothing in the 80s but by the early 2000s, they had vast empires in real estate, manufacturing, finance, and tech.
For these founders, business was survival, then success, and then legacy. Naturally, they expected their children to inherit, protect, and grow their empires. The idea of outsiders managing their businesses was unthinkable.
Fast-forward to today, and we’re seeing a fundamental disconnect between first-gen wealth creators and their next-gen heirs. Many of these young heirs, especially those born after 1980 in China - have no interest in running the family business.
But here’s the problem:
The business is still highly valuable and needs strong leadership.
The family wants to preserve its wealth and legacy.
The founder feels that only a family member can be trusted.
So, what happens when the only heir doesn’t want the job?
Why Next-Gen Heirs Are Rejecting the CEO Role
1. The Next Generation Has Different Dreams
The post-1980s and post-1990s generation in China, Hong Kong, and Southeast Asia grew up in a very different world from their parents. Unlike their founders—who started with nothing and had to hustle, many heirs were educated overseas, exposed to global opportunities, and have their own interests.
Some want to be tech entrepreneurs, investors, philanthropists, or artists - not factory or finance CEOs.
“I was sent to Harvard to study business, but I want to work in venture capital, not run my father’s industrial conglomerate.”
“My parents built a logistics empire, but I’m passionate about climate solutions. How do I tell them I don’t want to take over?”
2. Family Business Culture vs. Global Corporate Culture
Many Chinese and Asian family businesses are heavily founder-driven. Decision-making is centralised, and loyalty matters more than expertise. Heirs who studied overseas see how Western companies operate: with clear governance, meritocracy, and structured leadership teams.
When they come home, they find their family businesses lack these structures. They don’t want to be stuck in an old-fashioned, rigid system where their say is limited.
“At McKinsey, I was trained to work in a structured environment. In my father’s company, everything depends on his mood.”
“My father’s business decisions are based on trust, not strategy. I feel like an outsider in my own family’s empire.”
3. The Psychological Pressure of Inheriting a Legacy
Taking over a family business isn’t just about leading a company, it’s about carrying the weight of an entire legacy. Many next-gen heirs feel immense pressure and expectations, which can cause resentment, anxiety, or even depression.
“What if I fail? My whole family’s wealth is in this business.”
“I want to make my parents proud, but I don’t want this life.”
For heirs who are the only children, the pressure is even worse. They can’t pass the responsibility to a sibling. If they refuse, they feel like they are betraying their parents.
The Risk of Forcing an Unwilling Heir to Lead
Forcing the next-gen to run a business they have no passion for is dangerous. It leads to:
Poor decision-making → Lacking interest means they lack strategic vision.
Tension within the family → They might only do it to please their parents, creating long-term unhappiness.
Wealth destruction → A disengaged or unskilled leader can weaken a once thriving business.
We’ve already seen major failures in China and Asia where second-gen heirs took over and lost everything within a decade.
What’s the Alternative? Appointing Professionals Instead
For many Asian families, the idea of appointing an external CEO feels unnatural. “Outsiders can’t be trusted” is a common belief. But this mindset is changing, and global best practices show that professionalised leadership often leads to better business outcomes.
Best Practices from Successful UHNW Families
Hybrid Model: Heir as Chairman, Professional as CEO
The next-gen heir remains involved in governance and long-term vision, but a professional CEO handles daily operations.
Case Study: Many European and American family businesses have independent executives running operations while family members sit on the board.
Family Office Model
Instead of forcing heirs to run the business, they manage a family office that oversees assets, investments, and philanthropy.
This way, the business remains an asset but is professionally managed.
Long-Term Incentives for Professional CEOs
Founders fear that external CEOs will only care about short-term profits. The solution? Create long-term incentives to align the CEO’s interest with the family’s wealth preservation.
Governance & Succession Planning
Strong family governance (family constitution, advisory boards) ensures that businesses transition smoothly even if heirs step back.
The New Definition of "Family Business"
The old definition of a family business = family-run business is no longer sustainable. In today’s globalised world, the new model is:
Family-Owned, Professionally-Managed.
This way, next-gen heirs can pursue their passions while ensuring that the family’s wealth is protected through strong leadership.
As I’ve seen firsthand, many Chinese and Asian UHNW families are now adopting this mindset. It allows them to pass on their wealth and values without forcing the next generation into a life they don’t want.
And for many heirs, that’s the best gift their parents could ever give them.
Final Thought: The Choice is Not Binary
This isn’t an “either or” situation. The best approach is often a hybrid, next-gen heirs stay involved, but the business is professionally managed.
🌱 What do you think? Should heirs be forced to take over, or should professionals run family businesses? Share your thoughts with me.
