How Business Owners Approach Communication and Risk-Taking Infographic

November 28, 2023
  • Private Banking
In this issue’s “By the Numbers” infographic, we take a closer look at the statistics from our 2023 Private Business Owner Survey, particularly around estate and succession planning communication hurdles and how different genders view risk-taking in business.

Earlier this year, BBH conducted an inaugural Private Business Owner Survey. The respondents represented 400 U.S. private businesses with enterprise values from $10 million to $500 million and more. We asked about how the business affects their family, how they think about the future, what might happen when they step away from the business, and how business strategy might be changing due to economic conditions. Here, we look at some of our key findings around family communication and risk-taking.

Communicating Estate Plans

  • 98% of business owners have an estate plan
  • But 94% have not communicated their plan with their family. Why?
    • 49% want to be sure the plan is right
    • 42% dread the emotions and potential arguments
    • 36% feel unprepared to answer questions

Communicating Succession Plans

  • 85% of owners say it is very/extremely important that the business remains in the family for at least another generation
  • 84% of owners say a business decision/discussion has led to severe family disagreement
  • 100% have taken steps to prepare the next generation, but barriers exist:
    • 43% say it’s a challenge to choose a successor knowing it will cause family conflict
    • 75% feel that the roles are either not well-defined or not fully communicated
  • Nearly 2 in 5 anticipate a family member will take over leadership of the business when they’re ready to step away

Gender and Risk

  • For the most part, men and women business owners think alike – except when it comes to risk:
    • 78% of women and 69% of men say their business is mostly/fully recession-proof
    • 41% of women and 29% of men see their business as a fixed income investment
  • Are women business owners more or less risk-averse than men?
    • There’s no clear answer, but data looking at corporate risk taking among women executives and directors of S&P 500 companies gives some insight:
      • When a woman is CEO of a firm, there’s a significant positive increase in the amount of risk a firm undertakes
      • A firm’s risk-taking behavior has a positive relationship with the number and percentage of women board directors and a board having a “critical mass” of women
      • As the number of women executives in a firm increases, so does the amount of risk-taking by the firm
      • Having a greater number of women executives is related to increased spending on capital expenditures and research and development (R&D)
Up Next
Up Next

Speak Today, Plan for Tomorrow: Guidelines for Effective Communication

BBH Senior Wealth Planner Ross Bruch explores some of the psychological barriers to effective communication and provides five strategies for overcoming them to successfully plan for the future.

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