The first wave of British Columbia’s baby boomers turns 65 years old in 2011, prompting the biggest transfer of wealth in history, a high number of successions in family businesses and an enormous opportunity for the University of British Columbia’s Business Families Centre (BFC).
Strong demand has prompted the nine-year-old centre to expand its certificate program to Toronto in 2011 and introduce a designation program to help family business owners find qualified advisers.
The U.S.-based Family Business Institute has data that reveals:
- only 30% of family businesses survive into the second generation;
- 12% are still viable into the third generation; and
- 3% of those ventures successfully transition to the fourth generation or beyond.
Family-business members who want to improve their odds of a successful succession have been flocking to the BFC for advice.
The centre introduced what was originally a two-year certificate program in 2007 and then changed the structure in 2009 to make it a one-year undertaking.
“We were creating a bit of a problem in the marketplace,” revealed centre executive director Judi Cunningham. “We were educating the families.
“They would come back to us and say, ‘None of the advisers in the marketplace are actually educated or up to speed on any of the things that the centre is teaching.’”
When the centre was founded, its seminars were for family-business members only. Some of those participants urged the centre to allow advisers to take part.
But, the centre’s management team decided to keep virtually all seminars for family-business members only as a way to focus discussion.
The solution that the centre devised was to create a certificate program designed for advisers but that was also open for family-business members.
“Tax advisers, for example, are great at issuing tax planning for a family but they might not recognize that a family could also be facing issues related to succession,” said Sharon Duguid, director of the Centre for Entrepreneurs and Family Business at PricewaterhouseCoopers Canada.
Duguid graduated from the BFC’s certificate program in December.
“The idea here at PricewaterhouseCoopers is to create healthier families and healthier family businesses,” she said. “For me, the certificate program was valuable because it was a way of creating a cohesive thread of multiple subjects in a constant learning environment.”
The certificate program is a year-long commitment that consists of eight two-day courses. There are also study groups at the beginning and end, so students tend to spend about 20 days during the year on the course, which holds its two-day courses during the week on back-to-back days.
Once the BFC expands to Toronto, thanks in part to assistance from the Canadian Association of Family Enterprise, students in both Toronto and Vancouver will be able to take courses in a mix of the two cities if that is more convenient for them.
The designation in family enterprise advising that will be rolled out in 2011 will require passing both a written and an oral exam, an annual membership fee of about $500 and 14 hours of continuing education training each year, said Cunningham, who sometimes conducts seminars at the centre and is one of the centre’s nine faculty members.
She describes the new designation as being “the only one of its kind in the world.”
Cunningham has first-hand experience in family businesses as the daughter of Cunningham Group founder Jack Cunningham.
She watched her father smoothly transfer CEO duties to her sister Lorraine after frequent discussions with his two daughters and six sons.
Still, she believes that the process would have benefitted from more family meetings so family members could learn new information at the same time.
One of the Cunningham family’s most successful ventures was Crystal Services, which was founded by brother Terry Cunningham.
That Vancouver venture morphed into being Seagate Software and Crystal Decisions before becoming part of Business Objects and then the German software giant SAP AG.