Giuseppe Bernoni interviewed on succession planning in SMEs

Corriere della Sera - 21 January

Giuseppe Bernoni was recently interviewed by L’Economia, the weekly magazine of the Corriere della Sera (one of the main Italian newspapers) together with Ms. Marcella Caradonna, Chairman of the Italian Board of Chartered Accountants and Registered Auditors. The article focuses on the topic of succession planning in family businesses, especially SMEs, and on how the transition can be best managed when the founder alone controls all key relationships.

"There are no fixed rules in succession planning" declared Bernoni. "Any general tax or financial advice is influenced by the specific business scenario and by the relational aspect. This means that succession planning in small family businesses needs to be managed by advisors using a tailor-made approach, rather than a 'one-size-fits-all' one".

With reference to the timing and rules of succession planning, Bernoni further declared: "timing can be crucial. Having a succession plan means being attributed a good credit rating by banks. When applying for a loan, credit institutions actually penalise the concentration of powers and the lack of a succession planning. To this end there is still much to do, if we consider that only 7% of family businesses has a written succession plan, 10% has fixed a retirement age for the business leader and 35% has a plan on the rules and tax matters related to the succession".

According to Bernoni, a possible solution to the above could be that of entrusting managers with the responsibility for the business, "but a new corporate culture is needed. Not all entrepreneurs' children have the correct attitude to be a leader. On the other hand, there are various tools, from the Italian Civil Code to shareholders’ agreements, which allow managing succession planning as smoothly as possible".