Family-owned Businesses | CEE perspectives
Part 1 - LIFECYCLE
Family businesses are a powerful economic force in the CEE, accounting for around half of private sector employment. Like other businesses, they are addressing digitization, sustainability and ESG. But the lifecycle of a family-owned business raises specific challenges: succession, shifts in finance and ownership, governance and in many cases, the leap to listed status.
Family-owned Businesses: a Human Story – an investigation from the desk of the global Amrop Partnership
This first article plots the key stages in the lifecycle of an FOB — from foundation to eventual listed status.
Family-owned businesses (FOB’s) play a leading role on the global economic stage. Today they account for over 70% of GDP, with an annual turnover of $60-$70 trillion. They are responsible for about 60% of employment, supporting education, healthcare, and infrastructure. With an ability to out-ride turbulence, FOBs in general outperform other equivalents.7
At one point in their lifecycle the distinction between FOBs and other large businesses fades. But some unique factors linger. Above all, this is a human story. For our examination Amrop draws on the input of its senior Partners around the world, based on long track records of working with FOBs and trusted relationships with founders and successors. They are instrumental in positioning Leaders For What’s Next at board and C-suite level.
This series provides first-hand observations of the core challenges, pitfalls and strengths of FOBs, with insights and recommendations for firms and incoming executives. We’ll see that whilst every case is unique, certain traits and experiences are shared by many. We’ll learn how key factors play out in the leadership domain.
Our focus: growing and globalizing mid-sized FOBs (with a turnover in developed markets of minimum $1-10 bn, and in emerging markets of between $250 mn and $2 bn). Founders or descendants hold significant share capital and/or voting rights.
Oana Ciornei, Chair, Amrop CEE and Member of the Global Amrop Board sets the scene. “Moreover, the war in Ukraine is putting pressures on the region’s businesses: from inflation to energy prices and operational architecture. And global turbulence is rising. Yet the CEE retains its vibrancy, spirit and resilience. Diversification, infrastructure development and policy reforms are forging ahead. EU funding has spurred modernization and innovation hubs. Meanwhile, compliance with EU laws is elevating governance and transparency.
“Grit and gravitas are strong features of family-owned businesses worldwide. These facets are resolutely shared by CEE players, who are even outperforming their global peers in growth and ambition.2
“Many are expanding beyond national borders into neighboring CEE territories, Western European markets such as Germany, the UK and Scandinavian countries, or even further afield. And cross-border networks (for example the Visegrád group3) are fostering knowledge transfer and mentoring. And a number of family-owned businesses are active in cross-border mergers and acquisitions.
“Meanwhile, CEE family offices are investing in multiple sectors: cybersecurity, technology-driven media, fintech, health, food, and real estate. They are collaborating with private equity houses, supporting entrepreneurs in the CEE and beyond.4,5
“CEE family-owned businesses have everything to play for. Many were formed in the early 1990s after the fall of communism. Only now are they facing their first succession. Given this late start, few (as yet) feature on the 2025 Global Family Business index.6 But this is all set to change.”
Amrop CEE has long supported the region’s FOB’s in their quest for sustainable board governance and leadership succession. Both are of particular concern, say Amrop CEE Partners.
CEE Participants
Governance and succession are critical concerns
“In CEE, many family-owned businesses are now confronting the critical succession juncture,” says Miloš Djurković, Managing Partner, Amrop Serbia. “First-generation founders are preparing to hand over the reins. While an entrepreneurial spirit built their legacy, the next generation often lacks either the readiness or desire to take over. Cultural nuances—such as strong founder attachment, modest openness to outsiders, and limited early grooming—compound the challenge. To ensure long-term resilience, CEE FOBs must embrace structured succession planning, including professionalizing leadership while preserving family values. The future lies in blending legacy with modern governance and opening the door to trusted external guidance.”
Mircea Tiplea, Partner, Amrop Romania, concurs. “Transitioning from a founder-led to a founder-inspired organization is arguably the most significant event in the existence of a family-owned business. The cultural and emotional aspects of such a transition are critical. They cannot be addressed only by governance, advisors and a process-driven approach. It requires wisdom, character strength and skin-in-the-game from the key people involved: board members, advisors, family members and the chosen successor.”
Many CEE family-owned businesses are currently passing the reins from the first to the second generation. The timing is “an inheritance of socialism, where there were very few family companies,” says Željko Šundov, Principal, Amrop Adria. “These businesses face considerable challenges when it comes to crossing the bridge in the best and most timely way, if possible with successors from inside the family. Many are doing so late, with the majority of founders finding it difficult to separate from the company they created.”
But when it comes to attracting vital leadership talent from outside in a competitive CEE talent market, family-owned businesses may be impeded by their governance structures, warns Marko Mlakar, Managing Partner, Amrop Adria. “The overlap of ownership, management, and family roles often leads to informal decision-making and unclear accountability, which can deter external candidates. Succession planning is frequently emotionally driven rather than merit-based, and resistance to outside leadership may limit professionalization. As a result, ambitious leaders may view family firms as inflexible or lacking growth opportunities.” Fortunately there is a solution – investment clear governance can raise the bar. Companies with “independent boards, transparent processes, and defined succession plans become far more attractive to talent. These firms offer a compelling blend of legacy, stability, and long-term vision.”
Plotting the FOB lifecycle
A rucksack contains equipment that will serve its owner on a long and perilous journey. What might we find in the backpack of an FOB? A research team8 isolated four ‘critical mindsets’: “a focus on purpose beyond profits, a long-term view and emphasis on reinvesting in the business, a conservative and cautious stance on finances, and processes that allow for efficient decision making.” Our frontline exploration will repeatedly confirm these. At first, matters are relatively simple for an FOB: key positions held by the family supported by one or more trusted advisors. Then, like any good story, things start to move.
Amrop tracks some critical forks in the road, setting the scene for our next articles.
1 - Foundation: Key positions held by the family supported by one or more trusted advisors.
2 - Succession: 30% of FOBs survive the 1st generation and between 10% and 15% reach the 3rd. Only about 3% reach the 4th and beyond.9 Critical factors: Successor aptitude, motivation, early exposure to the business, education, entrepreneurial/ownership attitude, owner resistance, the dilution of decision-making as a family grows.
3 - Finance & Ownership: Generational share transfer, or no successors, taxation, industry dynamics, the imperative to transform, complexity, all impel the FOB to seek external resources. Critical decisions: Approach banks or private equity? Create, join or appoint a family office? Or go public, whilst ensuring the continuation of the firm’s founding purpose and values?
4 - Transformation: Shifts in the operating environment spur a new stage. Digitization and new competition threaten legacy territory. Critical issues: Portfolio re-engineering, diversification, streamlining or divestment, elevating talent capacity, re-engineering organization design, digitization, energy transition, incremental innovation.
5 - Governance: Prior to listed status and compliance with codes, FOBs face unique challenges to assure the smooth running of the business. Critical issues: Board positions created/assigned to family members to involve and remunerate them. Role proliferation. Phased family exit after ownership transfer. C-suite re-engineering.
6 - Standardization: With listing, and beyond a certain size, many distinctions between an FOB and non-family equivalents dissolve. Critical factors: Compliance with governance codes, regulatory constraints, ESG imperatives and shareholder scrutiny, whilst still retaining the family’s founding values.
REFRENCES
1,2 Family Business Survey CEE, 2023. PWC.
3 www.visegradgroup.eu
4 The rise of family office investments in CEE. (2025). CMS.
5,8 Family Offices You Should Know in CEE. (2024). The Recursive, 12 January 2024.
6 EY and University of St Gallen (2025). Global 500 Family Business Index, featuring the largest family businesses by revenue.
7 Asaf, A., Carvalho, I., Tellechea, J., Leke, A., Malatest, F. (2023). The secrets of outperforming family-owned businesses. McKinsey & Company
8 Haynes, G., Marshall, M., Lee, Y., Zulker, V., Jasper, C., Sydnor, S., Valdivia, C., Masuo, D., Niehm, L., Wiatt, R. (2020). Reviewing the past, contemplating the future. Journal of Family and Economic Issues (2021) 42 (supple): 570-583
9 Porfírio, J.A., Felício, J.A., Carrilho, T. (2020). Family business succession: Analysis of the drivers of success based on entrepreneurship theory, Journal of Business Research, Volume 115, 2020, Pages 250-257
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