By Ash Playsted

Principal Advisor, AP Advisor

THE FOUNDERS BRIEF

Edition 7

For decades, the founder-owned business has been romanticized as an extension of the individual who created it.

The founder carries the relationships. The founder makes the critical decisions. The founder holds the institutional memory. The founder sets the pace, protects the culture, resolves the difficult problems, and often remains the person whom clients, employees, suppliers, and lenders ultimately trust.

This model can be extraordinarily effective.

It can also become extraordinarily fragile.

The latest KPMG Global Family Business Report 2026 points to a structural transition that is now underway across privately owned enterprises around the world. The report is framed around family business, but its implications extend much further. It describes a broader movement away from businesses that are personally run by founders and families, and toward businesses that remain privately owned but are professionally governed, professionally managed, and institutionally structured.

This is not simply a change in management style.

It is a redefinition of what successful private ownership will look like over the next decade.

KPMG surveyed 1,927 senior leaders across 41 jurisdictions. The broad conclusion is striking. Family-owned enterprises remain confident in their strategic direction and deeply committed to the advantages of private ownership, including long-term thinking, patient capital, reputation, values, and stewardship. At the same time, many recognize that their current governance, talent, technology, succession, and risk capabilities are not yet sufficient for the environment ahead.

The contradiction is important.

These businesses are not losing confidence in private ownership.

They are losing confidence in informality.

From founder-run to founder-owned

The most consequential finding in the report is the projected collapse of the traditional family-run operating model.

Globally, the proportion of businesses identifying as family-run is expected to fall from 49 percent today to approximately 12 percent by 2035. Most are expected to move toward professional management, board oversight, holding-company structures, diversified investment portfolios, or family office models.

In Australia, the projected shift is even more pronounced. Family-run operating businesses are expected to decline from 53 percent today to just 9 percent by 2035. That is not an incremental adjustment. It is a structural revolution.

The founder-owned business of the future will increasingly be owned by the founder but not necessarily run by the founder.

That distinction matters.

Ownership and management have often been treated as if they are the same thing. In the early stages of a business, they usually are. The founder owns the equity, manages the team, wins the clients, controls the cash, and carries the risk.

But as the business grows, these roles begin to separate.

Professionalization is the process of resolving that tension.

It does not require founders to surrender ownership.

It requires them to become more deliberate about how ownership is exercised.

The end of the heroic founder model

Many successful private businesses are still built around what might be called the heroic founder model.

The founder remains the strategic center of gravity.

Important clients want the founder.

Senior employees defer to the founder.

Complex decisions return to the founder.

New opportunities require the founder’s involvement.

Difficult conversations are postponed until the founder intervenes.

This often looks like strength from the outside. Revenue may be growing. Profitability may be healthy. The brand may be respected. The founder may be admired.

"But a business can be commercially successful while remaining structurally immature."

The central question is not whether the founder is capable. It is whether the business has become capable without the founder.

This is where professionalization becomes a value creation issue rather than an administrative one.

A business that depends heavily on its founder is difficult to scale, difficult to finance, difficult to transfer, and often difficult to value with confidence.

The greater the dependency, the greater the risk.

The greater the institutional capability, the greater the optionality.

That optionality may eventually include succession, partial liquidity, external investment, acquisition, professional management, employee ownership, intergenerational transfer, or a full exit. But those outcomes are not created at the transaction table.

They are created years earlier through structure.

Governance is becoming infrastructure

One of the strongest messages in the KPMG report is that governance is no longer a ceremonial overlay for private business.

It is becoming operating infrastructure.

KPMG identifies governance and decision-making as the lowest-rated of the major family business value drivers. The implication is not that governance is unimportant. It is that governance has failed to mature as quickly as the businesses it is meant to support.

This is a familiar pattern.

The business grows. The number of employees increases. The customer base expands. The founder’s wealth becomes increasingly concentrated in the enterprise. The range of stakeholders broadens.

The consequences of poor decisions become more material. Yet the decision-making system remains largely unchanged.

The founder still holds the final authority.

The board, where one exists, may be informal.

Accountability is often implied rather than documented.

Strategy may live in the founder’s head.

Risk is managed through experience and instinct.

Succession is discussed occasionally but not governed as a formal program.

This is not necessarily negligent. It is often simply the result of organic growth.

Eventually, the absence of governance begins to slow decisions rather than accelerate them. Senior leaders become uncertain about authority. Family members may confuse ownership rights with operational roles. Executives may lack clear mandates. Strategic priorities compete without resolution. Important risks are acknowledged but not allocated.

Professional governance creates clarity around these questions.

Who owns the business?

Who governs it?

Who manages it?

Who advises it?

Who decides what?

Who is accountable for what?

These are not technical questions. They are the architecture of an enduring enterprise.

The institution must outgrow the individual

Perhaps the most revealing evidence in the report comes from businesses that have survived for more than a century.

Among these businesses, the perceived importance of individual family member skills and family networks falls substantially, while governance remains comparatively resilient. KPMG interprets this as evidence that longevity increasingly depends on the strength of the institution rather than the influence of any one family member.

That insight deserves close attention.

The first generation often creates value through personal force.

The later generations preserve value through systems.

The founder may create the original reputation, culture, relationships, and commercial model. But for the enterprise to endure, those advantages must be converted into something transferable.

Relationships must become organizational relationships.

Knowledge must become intellectual property.

Culture must become leadership standards.

Values must become decision principles.

Strategy must become a repeatable process.

Client service must become a system.

Risk management must become a discipline.

"The business must learn how to preserve the founder’s advantages without preserving the founder’s dependency. This is the essential work of institutionalization."

Professionalization is not corporatization

Many founders resist professionalization because they associate it with bureaucracy.

They fear losing speed, culture, entrepreneurship, or control.

Those fears are not irrational.

Poorly designed professionalization can create exactly those outcomes. Too much process can suffocate initiative. Excessive reporting can distract management. Corporate language can replace commercial clarity. External executives can misunderstand the values that made the business successful.

But professionalization and corporatization are not the same thing.

Corporatization often adds structure for its own sake. Professionalization adds structure where it improves decision quality, accountability, resilience, and scalability.

The objective is not to make the business feel like a large public company.

The objective is to ensure that the business no longer relies on invisible systems carried by the founder.

The best privately owned businesses will preserve the advantages of private ownership while adopting the disciplines of institutional enterprise.

They will remain patient, values-driven, entrepreneurial, and relational.

But they will also become more explicit.

More governed.

More measurable.

More capable of attracting professional leadership.

More able to withstand transition.

The future is not founderless.

It is founder-independent.

Talent changes the ownership model

The shift toward professional management also creates a new talent challenge.

The report identifies attracting external talent as one of the most important people issues facing family-owned enterprises. The reason is straightforward. As businesses professionalize, they increasingly need executives with capabilities the founder or family may not possess.

This can be uncomfortable.

A founder who has built the business from nothing must eventually consider hiring people who are more experienced in certain areas than they are.

A chief operating officer may be better at execution.

A chief financial officer may be better at capital allocation.

A professional CEO may be better equipped to lead the business through its next phase.

An independent director may be more capable of challenging the founder’s assumptions.

This requires confidence from the owner.

It also requires a credible proposition for professional talent.

Strong executives do not merely want salaries. They want authority, clarity, development, meaningful influence, and often some participation in the value they help create.

The traditional founder bargain of loyalty in exchange for proximity is becoming less effective.

The new bargain will increasingly involve defined accountability, meritocratic advancement, long-term incentives, leadership pathways, and in some cases equity participation.

Professionalization therefore changes not only the operating model, but the ownership mindset.

The founder must stop viewing talent as support and begin viewing it as institutional capability.

Succession must become a program

The KPMG report also exposes a familiar strategic failure.

Succession is widely recognized as important, but it remains persistently deferred.

In the short term, only 20 percent of respondents identify succession and next-generation readiness as a leading challenge. Over the longer term, that figure rises to 31 percent.

This is the classic tension between the urgent and the important.

Day-to-day pressures dominate attention.

Succession remains somewhere on the horizon.

But succession is not one decision.

It is a sequence of capability-building decisions that may take five, ten, or even fifteen years.

The successor may need development.

The management team may need strengthening.

Governance may need formalization.

Ownership may need restructuring.

Capital may need to be released.

Family expectations may need to be aligned.

The founder’s role may need to be redesigned.

The company may need to reduce key-person dependency.

The personal identity of the founder may need to evolve before the business can.

KPMG’s recommendation is that succession should be treated as a long-term program rather than an event. It advocates beginning capability development at least a decade before a planned transition, supported by formal mentoring, clear employment policies, governance forums, and structured development.

That approach is not limited to family succession.

It applies equally to founders considering management succession, employee ownership, private equity, merger, partial sale, or external acquisition.

Succession planning is not primarily about who takes over.

It is about whether the business is capable of continuing without disruption to value.

The founder must professionalize before the business can

There is an uncomfortable truth inside all of this.

Businesses do not professionalize unless owners allow them to.

The founder is often both the greatest source of enterprise value and the greatest constraint on its institutional development.

The founder may want a stronger leadership team but continue to reverse its decisions.

The founder may want independence but remain involved in every client relationship.

The founder may want an advisory board but resist challenge.

The founder may want succession but refuse to redefine their own role.

The founder may want liquidity but remain unwilling to share information, authority, or ownership.

This is why professionalization is not simply an organizational project.

It is a personal transition.

The founder must learn to derive confidence from the strength of the institution rather than from their own indispensability.

That is a profound change.

For many founders, the business has become a source of identity, status, purpose, community, and security. Stepping away from day-to-day control can feel less like progress and more like loss.

This is why purely technical succession plans so often fail.

They address the entity.

They do not address the owner.

The rise of the strategic owner

The most sophisticated founders are beginning to redesign their role before necessity forces them to.

They are moving from operator to strategic owner. The strategic owner does not disappear. They move above the operating noise.

They focus on: capital allocation, enterprise risk, leadership quality, governance, strategic direction, culture, succession, ownership architecture, major relationships, long-term value creation.

This role is often more valuable than the founder’s former operational role, but it requires different habits.

Less intervention.

More oversight.

Less problem-solving.

More capability-building.

Less control through presence.

More control through governance.

The strategic owner is not absent.

They are operating at the correct altitude.

Why this matters now

The report’s timing is significant.

Professionalization is not occurring in isolation. It is being accelerated by AI, cybersecurity, regulation, talent shortages, changing customer expectations, capital complexity, and rising enterprise risk.

Only 33 percent of surveyed businesses have a comprehensive enterprise risk management framework, and fewer than one in five strongly agree that risk responsibilities are clearly defined.

AI adoption is also moving faster than governance. KPMG warns that technology deployment without accountability can create operational, regulatory, reputational, and ethical exposure, particularly for businesses whose reputation is central to their value.

These issues are interconnected.

Weak governance makes AI riskier.

Weak leadership makes succession harder.

Weak succession increases key-person dependency.

Weak risk management makes growth more fragile.

Weak ownership alignment makes external capital more difficult.

Professionalization addresses the system rather than the symptoms.

A new definition of success

For many founders, success has traditionally meant building a profitable business.

That is no longer enough.

A profitable business may still be dependent.

A growing business may still be fragile.

A valuable business may still be illiquid.

A successful founder may still be trapped.

The next standard of success will be higher.

Can the business operate without the founder?

Can it attract and retain high-caliber leadership?

Can it make high-quality decisions without relying on one person?

Can it survive ownership transition?

Can it govern technology and risk?

Can it provide liquidity without destroying the enterprise?

Can the founder choose their level of involvement?

Can the institution endure beyond the individual?

"These questions define the professionalization agenda. They also define founder freedom."

The great professionalization

The professionalization of founder-owned businesses will be one of the defining private enterprise trends of the next decade.

It will change how businesses are governed.

How leaders are recruited.

How founders think about control.

How capital is deployed.

How succession is designed.

How value is measured.

And how ownership itself is understood.

The businesses that thrive will not be those that abandon their founder identity.

They will be those that successfully convert founder advantage into institutional capability.

They will retain the patience, purpose, culture, and long-term orientation of private ownership.

But they will pair those qualities with professional leadership, clearer governance, stronger systems, disciplined risk management, and deliberate succession.

The founder’s ultimate achievement is not simply building a successful business.

It is building an enterprise strong enough to no longer require the founder to carry it.

That is the great professionalization now underway.

And for many successful founders, it may be the most important work still ahead.

Ash Playsted
Principal Advisor
AP Advisory | Private Strategic Office

"Founder optionality begins the moment your wealth starts working for you, instead of remaining trapped inside the business that created it."