Rupert Murdoch’s News Corporation is one of the largest and most powerful media conglomerates in the world, owning such widely recognized media brands as the Wall Street Journal, Fox News and many newspapers and TV stations in Britain. But despite the vast reach of his media empire, in many ways Rupert Murdoch runs the publicly traded company as kind of a very large family-run business.
Rupert Murdoch (age 81) still serves as Chairman and CEO of News Corp. and his sons have served in high-ranking leadership positions. But recently, News Corporation has come under fire from investigators and authorities in Britain and the U.S. One of the company’s tabloid newspapers, News of the World, in London was found to have been hacking into the cell phones of thousands of politicians, celebrities and even a murdered teenage girl (in hopes of getting a scoop, apparently). The company is also under investigation for bribing politicians in the United Kingdom.
James Murdoch, Rupert Murdoch’s son, recently stepped down from his executive role at the company’s UK newspapers. James had been widely seen as the heir apparent to succeed Rupert Murdoch as CEO.
If News Corporation is guilty of all the malfeasance and criminal behavior that they have been accused of, then of course they will deserve the consequences. But aside from questions of guilt or innocence, is it possible that part of the company’s problem is that it’s basically still a “family-owned business” that’s gotten too big for that family to manage?
One of the biggest challenges facing a family owned business is succession planning. What happens with the patriarch/matriarch/founder of the business decides that they want to retire, or sell the company to pursue other interests?
Here are a few ideas to keep in mind to make a smooth transition for your own business’s succession planning:
- Start early: Succession planning should not start in the last few months or weeks before the owner wants to retire. It should take a few years to identify potential future leaders, train them and prepare them for the new role, and then go through a transition period to get them ready to take the top job at the company. The bigger and more complex the company, the longer it takes.
- Build a pipeline of talent: Succession planning is not just about finding one key person to replace the CEO, it’s about developing a larger pipeline of talented future leaders who are moving up through the ranks and who can be called upon to take leadership positions within the company.
- No one is indispensable, but just in case… Many small businesses rely on a “key person” who has special skills, expertise or customer contacts. If you have a key person at your company that you really couldn’t imagine continuing on without, perhaps you should purchase “key person insurance.” This is a way to protect your company in case your key person was to die or become incapacitated.
Most small businesses are never going to grow as big as Rupert Murdoch’s News Corporation, and fortunately most businesses will never face such grave and shocking accusations of misconduct as Rupert Murdoch’s company now faces. But no matter what size your company, it’s never too early to start thinking about your firm’s succession plans. Succession planning is a way of ensuring that your company has a bright future even after you’re gone.
Ready to start a business and build your own business empire? Talk to CorpNet for a free business consultation on how to incorporate a business. CorpNet’s free tools, advice and guidance can help you choose a business structure, form an LLC, set up an S-Corporation or other corporate entity to protect your assets and attain the corporate tax benefits and financial advantages of doing business as a corporation.