THE MURDOCHS AND SUCCESSION: LIFE IMITATING ART?

Rupert Murdoch is one of the most notable businessmen of the modern age.  

Whilst he has both supporters and critics, neither can disagree that he has had enormous impact in print and broadcast media in the half-century since he bought his first UK print title. 

Over the course of the intervening decades, he has established a sprawling and largely profitable empire extending across the globe, from his native Australia to the UK and the United States. 

That news, entertainment and publishing operation has made him incredibly rich and influential, one reason why he has himself rarely been far from the headlines. 

In the last week or so, however, coverage of Mr Murdoch has not been about the current performance of his businesses as much as what might become of them in the future. 

That is because he has been taking part in a probate court hearing in Nevada together with four of his children (view). 

Three of them – Prudence, Elisabeth and James – have challenged their father’s decision to change the terms of a family trust which holds a significant stake in those enterprises. 

It has been reported that the trust was originally intended to give all four children an equal say in how the Murdoch companies, including News Corp, which owns The Times newspaper, are run. 

Rupert Murdoch, though, wants to ensure that his media companies remain under the control of his son, Lachlan, who is thought to share views similar to the conservative standpoint of his father rather than those of his “politically moderate” siblings.  

The arguments might seem familiar to the plot line of the popular drama ‘Succession’, which was actually screened on the Sky TV network founded by Mr Murdoch Senior. 

Although rival media organisations have tried to gain access to the US proceedings, their outcome appears likely to remain confidential. 

Even so, the fact that they have taken place, arguably still holds important lessons for other family businesses, regardless of whether they involve the same wealth or international scale. 

That is because family conflict is, sadly, far from uncommon. Given too that entrepreneurship is an increasingly factor in British corporate life, the prospect of domestic disputes derailing business operations is not unusual. 

Figures produced by the House of Commons’ Library in May detailed how micro-SMEs – those employing up to 10 people – now make up 95 per cent of all private sector businesses and account for more than one-fifth of the entire turnover of UK plc (https://commonslibrary.parliament.uk/research-briefings/sn06152/). 

According to research carried out on behalf of the Institute for Family Business in 2021, the vast majority of companies are family enterprises (https://www.familybusinessunited.com/ukfamilybusinessstatistics). 

They often represent not only a family’s main source of income now but possibly for generations to come. 

Effective succession planning, therefore, is as much a priority as the current business plan. 

We have worked with many businesses, both large and small, to help them establish strategies for what will happen once the founders retire or pass away. 

Such a process naturally requires discussion and transparency. Not everyone will see eye-to-eye but the best plans take into account everybody’s views. 

The more detailed that they are, the better because a comprehensive examination can avoid nasty surprises, such as a potential divorce, which might threaten the continuity of a business and with it a family’s financial stability. 

Some organisations have two boards: one, purely comprising family members to determine their opinions of how a business is run together with another corporate body that listens to those views but is made up of non-family managers or directors. 

Done well, planning will be able to address any points of contention and adapt to changing family or economic circumstances. 

Having said all that, succession plans are simple enough in essence to put together and incredibly useful. 

Not all families have the fortunes enjoyed by the Murdochs but failing to plan can mean companies of all sizes seeing their prospects being at least delayed by discord. 

Discussing the bigger future business picture and putting appropriate structures in place is essential to keep firms on the road to success for many years to come. 

ENDS