How the Rich List is dodging real-life Succession dramas

It’s the billionaire version of four funerals and a wedding.
In the past 12 months, the Financial Review Rich List has farewelled four of its most iconic figures: Sydney property icon Lang Walker, veteran rag trader Marc Besen, car dealing legend Laurie Sutton and agribusiness giant John Kahlbetzer. Then in March, media magnate Rupert Murdoch, 93 – who has two children on this year’s list – announced he would marry his girlfriend, Elena Zhukova, 67.

On the surface, all of these events have the potential for succession drama: bitter fights over control of business empires, siblings going their separate ways, old wounds resurfacing as new partners are cut in.

But remarkably – and perhaps a little sadly for those who take comfort from knowing rich families have problems like the rest of us – these life events have caused barely a ripple in the family fortunes. Indeed, with the exception of Gina Rinehart’s epic and ongoing family feud and the Murdoch brothers’ long-running power struggle (Lachlan won), Australia’s business landscape has remained relatively free of succession stoushes.

So how have most of our richest managed to avoid the fate of the Roy family in the hit TV drama Succession? Good planning has been key.

It is 30 years since the Rich 200 edition (previously published by the now defunct BRW magazine) contained one of the first pieces foreshadowing the looming transfer of wealth to the next generation; in 1994 it said the “corporate landscape has taken on a greyer hue” as 107 members of the Rich List made it past 60 years of age.

More than 20 years ago, your columnist penned a similar piece, noting the 10 richest were over 65. Invariably, such stories pointed to a string of studies – which hold true today – showing the percentage of family businesses that make it to the second generation has remained stubbornly low at around 30 per cent. The rich have heeded these warnings and, in the majority of cases, put in place clear, practical succession plans.

A key part of these plans is usually bringing in outside help, either from independent board members, trusted external advisers or non-family executives. Lang Walker’s empire will remain under family control, for example, but will be run by senior executives who Walker handed day-to-day control to last year, as part of a carefully developed succession process.

Beyond this, there are many different structures in place. In some instances, power is shared and then transferred over time; a good example is Michael Heine and his son, Matt, at listed investment platform business Netwealth, who worked as co-CEOs before Matt took over sole responsibility and Michael became a director.

In other businesses, there is a clear delineation between siblings. Johnny and Markus Kahlbetzer, respectively, run the family’s agribusiness and venture capital businesses of the empire left following the death of father John last year, while the children of pub baron Arthur Laundy all have different roles in his business.