Should an In-law Become CEO?
My daughter-in-law is a very able executive who is among my potential successors. Is there any research concerning the success of in-laws as successors? What should I be thinking about as I consider the possibility of making her CEO of our family business?
While family businesses may hesitate to put an in-law in the top leadership position (some stipulate blood relations for successors), others have achieved great success with in-law CEOs. We don't know of any studies that correlate in-law leadership with family business success, but we've had experience with many family businesses that chose in-laws for top leadership.
In choosing any CEO, the first consideration is the candidate's capability. You’ve already thought about that, but you might seek other opinions---particularly about the candidate’s fit in terms of values and chemistry --- from your executives and others.
Our experience suggests that long-term success depends on how the CEO position is structured. Does the position enjoy appropriate responsibility and accountability? Is a solid board in place to provide support and oversight? Is compensation appropriate and does it provide incentives that support business and owner goals and values? Is there a good process for performance appraisal? If these systems are in place, the CEO can be a blood relative, an in-law, or a non-family executive.
The other concern, of course, is what happens to the business in case of divorce. Again, family business experiences vary. In some cases, the former in-law departs. In other cases, boundaries between business and family are so clear that the former spouse remains. Every business should have contingency plans for the loss of a CEO, whether by death, disability, poor performance or divorce.
In short, the answer to your question may depend less on the marital relationship of the CEO than on how your family business is structured and operated.
Articles purchased or downloaded from Family Business Consulting Group® are designed to provide general information and are not intended to provide specific legal, accounting, tax or other professional advice. Since your individual situation may present special circumstances or complexities not addressed in this article and laws and regulations may change, you should consult your professional advisors for assistance with respect to any matter discussed in this article. Family Business Consulting Group®, its editors and contributors shall have no responsibility for any actions or inactions made in reliance upon information contained in this article. Articles are based on experience on real family businesses. However, names and other identifying characteristics may be changed to protect privacy.
The copyright on this article is held by Family Business Consulting Group®. All rights reserved.
Articles may be available for reprint with permission. To learn more about using articles for your publication, contact firstname.lastname@example.org.