Family Business Governance, Succession Planning and Generational Performance

Author(s):Suresh Mahadeva, Kavitha Balakrishna

Affiliation: Thomas Schmidheiny Centre for Family Enterprise, Indian Institute of Management Ahmedabad, Gujarat, India

Page No: 130-133

Volume issue & Publishing Year: Volume 3, Issue 4, April 2026

published on: 2026/02/15

Journal: International Journal of Advanced Multidisciplinary Application.(IJAMA)

ISSN NO: 3048-9350

DOI: https://doi.org/10.5281/zenodo.19710074

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Abstract:
Family businesses constitute the dominant form of enterprise organisation in India, accounting for an estimated 67% of BSE-listed companies by count and 54% by market capitalisation — a proportion significantly above the global average for listed markets that reflects India's historical accumulation of family business groups (the 'house of Tata', 'house of Birla', and similar conglomerates) that survived post-Independence economic policy turbulence through family cohesion and political networking that professional management organisations could not sustain. India's family business landscape is simultaneously at a critical inflection point: the generational succession from founders or second-generation owners to third-generation inheritors — often educated at IITs, IIMs, and international universities — is occurring at the same moment that external governance pressures (SEBI's mandatory independent director requirements, institutional investor engagement, family quarrel-induced governance failures at Cyrus Mistry-Tata and ADAG group level) are forcing professionalisation. This study analyses 422 Indian family businesses — 284 BSE-listed and 138 unlisted — across sectors, examining the relationship between governance formalisation (family council, succession policy, independent board, shareholding clarity), generational stage (1st, 2nd, 3rd generation ownership), and firm performance (ROA, revenue growth, employment generation). A treemap visualises the sector distribution of family business revenue; radar charts reveal succession readiness profiles across governance dimensions; violin plot distributions confirm the 1st-generation performance premium over 2nd and 3rd generation; and a lollipop chart tracks governance reform adoption versus SEBI target levels. The University of Witten/Herdecke collaboration contributes the STEP (Successful Transgenerational Entrepreneurship Practices) programme database and the family business governance maturity framework.

Keywords: family business, succession planning, corporate governance, India, generational transition, family council, BSE, SEBI, professionalisation, STEP programme, family enterprise

Reference:

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