Family feuding can be fatal to a family-owned business, according to Dirk Jungé, chairman and chief executive of Pitcairn, the Jenkintown, Pa.-based multifamily office.

“The largest threats to a family-owned business are less about business issues and more about the family dynamics that result from the change of control and/or transfer of wealth from one generation to the next,” Junge said at a recent conference for family companies in Celebration, Fla.

“In transitioning a family business from one generation to another, the senior generation, or founding member, tend to maintain total control, but this can lead to conflicts between members of the next generation,” Jungé said in his address to family business members at the conference, entitled, “Transitions:  The Changing Environment for Family Companies.” 

“Each generation has to realize that the other has very specific needs,” Junge said. “Issues may range from change in control to ensuring long-term liquidity needs. This is exactly why communications among all layers of the family is imperative to successful transitioning of family business wealth from one generation to another,” he said.

Jungé also discussed best practices, including making governance a top priority; making succession planning a process not an event; involving  multiple generations; maintaining liquidity and  effective communications and unity in the family.