In Spain, according to recent data, up to 30% of business activity may be compromised by a lack of understanding between owners — often members of the founding family — and professional managers. This disconnect, invisible in day-to-day operations, often emerges at critical moments: a merger, an acquisition, a succession. This is when the lack of structure turns into conflict, and tradition clashes with efficiency.
The silent risk of dual governance
Family businesses operate according to a dual logic: on the one hand, the owning family, with its values, history and personal expectations; on the other, the executive management, responsible for making decisions based on profitability, growth and sustainability. In theory, both sides should be aligned. In practice, this is not always the case.
Dual governance creates tensions when there is no clear structure. For example, it is common for family members to demand results without actively participating in management, or for managers to have their decisions questioned by those who do not hold formal positions. In M&A processes, where agility and strategic focus are vital, these frictions can delay key operations or even cause them to fail.
The problem is not the existence of this duality, but its disorganisation. Alignment between ownership and management in family businesses requires mechanisms that channel family participation without interfering with professional management.
A critical snapshot of family businesses in Spain
Understanding the root of the problem requires looking at the present. Fifty-three point six per cent of family businesses in Spain are in their first generation, and 37.2 per cent are in their second. Only a meagre 2 per cent survive to the fourth generation. This is not due to a lack of talent or vision, but rather to a lack of institutional preparation for succession.
Seventy per cent of first-generation family businesses lack a succession plan. The result? Conflicts, improvised decisions and operational paralysis.
At the same time, these same companies are key players in the market: in 2023, 43% of mergers and acquisitions in Spain were carried out by family businesses. They even surpassed private equity and large corporations. This demonstrates two things: their relevance and their vulnerability.
When a family business enters an M&A process without clear governance, the risks multiply. The lack of alignment between ownership and management in family businesses can slow down decisions, divide partners and dilute the value that took so much effort to build.
Consequences of internal misalignment
The lack of alignment between ownership and management in family businesses has tangible consequences, which are sometimes irreversible. A recurring example is strategic decisions being blocked by generational differences. Parents want to keep the business as it is, while children are committed to growth through acquisitions. Without clear rules, immobility wins. Or worse: a breakup occurs.
In other cases, the absence of a family protocol leads to legal disputes. Companies that could have grown or diversified their activities end up being sold to third parties because of an inability to agree on a common direction. Emotional value is not enough when there are no mechanisms in place to resolve disagreements.
There are also situations where professional managers leave the company because their judgement is constantly questioned by family members with no training or executive responsibilities. The loss of management talent in these cases costs more than a bad investment.
These conflicts do not arise overnight. They are the cumulative symptoms of poor governance. And their cost is extremely high: not only in economic terms, but also in terms of reputation and emotion.
Professionalisation and clear structures
Alignment between ownership and management in family businesses does not happen by inertia. It requires specific decisions. The first is to professionalise management. This involves bringing in external managers with experience and, above all, objectivity. It is also key to integrate independent directors into the board of directors to provide strategic vision beyond the family name.
The second step is to clearly define roles. Who makes decisions? What powers does the family have? What powers does management have? This is where the family protocol becomes indispensable. When well designed, it acts as a coexistence agreement: it regulates expectations, sets rules for participation and establishes mechanisms for resolving differences without taking them to a personal level.
The third pillar is the corporate structure. Many family businesses operate as if they were sole proprietorships, but growth requires more solid vehicles. The creation of a family holding company allows for the separation of operational management from asset management, facilitates generational succession and optimises taxation. It also allows for professionalisation without losing control.
Govern with vision and without fear
Aligning ownership and management in family businesses is the main strategic challenge of our time. It is no longer enough to have good products or a history of success. What ensures continuity is the ability to transform that legacy into a functional, clear and future-proof structure.
At Confianz, we have been supporting family businesses in this process for years. With solutions tailored to their reality, their values and their long-term vision. If your company is facing this dilemma, don’t put it off. Let’s talk.