The Adviser's Six-Point Checklist to Failure-Proof Client Succession

Business succession often makes headlines for the wrong reasons: leadership disputes, fractured partnerships, stalled growth, and value destroyed. Family-owned companies, founder-led SMEs, and partnership-driven firms all face the same recurring issues: no clear governance, no agreed plan, and no alignment between owners, managers, and stakeholders.

The good news is that advisers can step in before the damage is done. By running a structured succession process, you can give business owners the tools to protect both wealth and relationships.

Here’s a six-point “failure proofing” checklist you can use with clients today.

1. Document control and decision rights (now, not later).

• Map who holds control: voting power, shareholder classes, trustee powers vs. management authority.
• Align board charters and “reserved matters” so decisions are clear and enforceable.
• Deliverable: a simple one-page delegation matrix.

2. Create a family governance layer.

• Establish a Family Council: set cadence, agenda, dispute protocols, and information rights.
• Adopt a Family Constitution that anticipates incapacity, marriage/divorce, and philanthropic priorities.
• Outcome: clarity on family voice without undermining management.

3. Cement management succession (bench, timelines, KPIs).

• Define critical roles, successors, and handover plans.
• Use performance scorecards and board-reviewed milestones.
• Ensure owners see progress through transparent timelines.
  

4. Incentivise continuity with a Ladder to Equity.

• Transition key talent from bonus → profit share → equity → control.
• Use structures like the Peak Performance Trust (PPT ESOP), scalable and designed for private companies.
• Keeps top performers invested in the business’s long-term success.

5. Pre-plan owner liquidity (without weakening the balance sheet).

• Model staged internal sales (MBO/MBI), ESOP take-outs, or minority external capital.
• Use real-time modelling to show “before and after” impacts.
• Owners gain flexibility without destabilising the business.

6. Build a dispute-resistant shareholder agreement.

• Include clauses for forced transfer, drag-along/tag-along, incapacity, insolvency, and deadlock mechanisms.
• Bake in valuation formulas, binding mediation, and arbitration steps.
• This becomes the rulebook for when tensions inevitably arise.

The best starting point is a Business Insights Report (BIR). It baselines risk, value, and readiness, then helps you prioritise these six actions into a 90-day sprint plan your clients will fund.

Everything maps back to our 21-Step Succession Framework, so you’re not just diagnosing the risks, but delivering a pathway to protect value.

Succession doesn’t fail because it’s hard, it fails because it’s left too late. This checklist gives advisers a way to get clients moving before value and relationships are lost.