When one of India's most respected business families, the 125-year-old Godrej family, agreed to split its businesses in 2024 between two branches, the rationale was not merely financial.
Jamshyd N. Godrej, Chairman & Managing Director of Godrej & Boyce Manufacturing Company Ltd, observed: “With the new generation taking over in both families, there were different ideas on how to take the businesses forward.” In essence, the family acknowledged a reality increasingly faced by business families: that the third and fourth generations had divergent interests and views on corporate strategy, group growth plans, wealth management and more importantly, governance.
Thus, the successful Godrej settlement offers a compelling lesson for India’s long list of family businesses – at a time when $1.3–1.5 trillion is set to change hands through a mega inter-generational wealth transfer – that succession planning is not just about deciding who inherits what, but equally about creating governance structures that help and guide successive generations to own, manage and grow that wealth without allowing strategic differences to become family conflicts.
Families today are becoming smaller, and economic growth and entrepreneurship have resulted in significantly larger concentrations of wealth among fewer heirs. Family businesses, investments and real estate portfolios accumulated over decades have expanded dramatically in both scale and complexity. At the same time, the environment into which today's grandchildren will inherit wealth is becoming harder to predict.
The solution, therefore, seems to be preparing families – not for one well-defined future, but for several possibilities.
It is important to build resilience, adaptability and sound decision-making capabilities into the family's governance and ownership structures.
The most valuable legacy that today's wealth creators can leave behind is not a specific investment portfolio or business strategy, but a framework capable of evolving with changing circumstances.
Many families mistakenly assume that significant wealth will automatically lead to financial maturity. Experience suggests otherwise.
Future generations often require education, mentoring and structured exposure to family enterprises, investments and governance processes long before they assume leadership roles. Professional succession planners, family offices and trusted advisers can play a critical role in developing these capabilities systematically.
To help them ease into the helm of affairs, family seniors must introduce younger family members into the business, investment decisions, philanthropy, and family governance. As increasingly being seen in other major Indian family-owned groups, different generations must actively participate in structured discussions about the family's values, risk appetite and long-term objectives. This is very relevant as enormous wealth is getting concentrated among fewer and fewer heirs.
Build ‘grandchildren friendly’ framework – not forecast: A flexible succession plan – detailing or fully comprehending the potential risks, opportunities for diversification, taxation issues, philanthropic avenues, high corporate governance standards and long-term capital allocation plans – would equip the succeeding generations to make better decisions as well as seek some guidance, whenever they need.
The same dynamism must also be shown to periodically review trusts and ownership structures, reassessing investment priorities and strategies, preparing all potential succession scenarios and giving future generations clearly defined roles that can evolve as their capabilities and circumstances change.
Indian business families increasingly recognise that there is no perfect blueprint for the future. Markets change, industries evolve and family dynamics shift over time. What families can create is a living blueprint: one that combines sound governance, responsible ownership, stewardship values and adaptability.
The true measure of a successful succession plan is not whether wealth survives the next generation. It is whether future generations possess the capability, discipline and shared vision to preserve and grow that wealth while maintaining family harmony.
In the end, the greatest inheritance grandparents can leave behind is not their wealth itself, but a framework that enables future generations to use that wealth wisely.
Jamshyd N. Godrej, Chairman & Managing Director of Godrej & Boyce Manufacturing Company Ltd, observed: “With the new generation taking over in both families, there were different ideas on how to take the businesses forward.” In essence, the family acknowledged a reality increasingly faced by business families: that the third and fourth generations had divergent interests and views on corporate strategy, group growth plans, wealth management and more importantly, governance.
Thus, the successful Godrej settlement offers a compelling lesson for India’s long list of family businesses – at a time when $1.3–1.5 trillion is set to change hands through a mega inter-generational wealth transfer – that succession planning is not just about deciding who inherits what, but equally about creating governance structures that help and guide successive generations to own, manage and grow that wealth without allowing strategic differences to become family conflicts.
Smaller families, bigger wealth:
For decades, succession planning in India largely focused on identifying heirs, dividing assets and establishing legal structures such as wills and trusts. While necessary, these measures are no longer sufficient.Families today are becoming smaller, and economic growth and entrepreneurship have resulted in significantly larger concentrations of wealth among fewer heirs. Family businesses, investments and real estate portfolios accumulated over decades have expanded dramatically in both scale and complexity. At the same time, the environment into which today's grandchildren will inherit wealth is becoming harder to predict.
A challenging present with no future insights:
Geopolitical instability, technological disruption, climate risks, demographic shifts and the rapid emergence of Artificial Intelligence continue to reshape industries and economies. Businesses that appear dominant today can become obsolete with surprising speed. In such an environment, succession planning must move beyond preparing a family for one expected future. Instead, families must be equipped to navigate multiple possible futures.The solution, therefore, seems to be preparing families – not for one well-defined future, but for several possibilities.
It is important to build resilience, adaptability and sound decision-making capabilities into the family's governance and ownership structures.
The most valuable legacy that today's wealth creators can leave behind is not a specific investment portfolio or business strategy, but a framework capable of evolving with changing circumstances.
Move from mere inheritance to stewardship:
Both the elders and the new generations must understand that wealth transfer is not about a mere transfer of assets; it is also about a handover of a big responsibility – including the one to protect and preserve the legacy and the brand. An heir may inherit a part of the family's business or wealth, but that does not automatically equip them to understand and handle it, participate in the governance or make difficult decisions about its future.Many families mistakenly assume that significant wealth will automatically lead to financial maturity. Experience suggests otherwise.
Future generations often require education, mentoring and structured exposure to family enterprises, investments and governance processes long before they assume leadership roles. Professional succession planners, family offices and trusted advisers can play a critical role in developing these capabilities systematically.
Know what you have in future, what you owe to the present
Children and the grandchildren, enlisted in the succession plan, need to be aware of - not just what they own, but why those assets exist, how they were created and what responsibilities accompany their respective ownership.To help them ease into the helm of affairs, family seniors must introduce younger family members into the business, investment decisions, philanthropy, and family governance. As increasingly being seen in other major Indian family-owned groups, different generations must actively participate in structured discussions about the family's values, risk appetite and long-term objectives. This is very relevant as enormous wealth is getting concentrated among fewer and fewer heirs.
Build ‘grandchildren friendly’ framework – not forecast: A flexible succession plan – detailing or fully comprehending the potential risks, opportunities for diversification, taxation issues, philanthropic avenues, high corporate governance standards and long-term capital allocation plans – would equip the succeeding generations to make better decisions as well as seek some guidance, whenever they need.
The same dynamism must also be shown to periodically review trusts and ownership structures, reassessing investment priorities and strategies, preparing all potential succession scenarios and giving future generations clearly defined roles that can evolve as their capabilities and circumstances change.
Indian business families increasingly recognise that there is no perfect blueprint for the future. Markets change, industries evolve and family dynamics shift over time. What families can create is a living blueprint: one that combines sound governance, responsible ownership, stewardship values and adaptability.
The true measure of a successful succession plan is not whether wealth survives the next generation. It is whether future generations possess the capability, discipline and shared vision to preserve and grow that wealth while maintaining family harmony.
In the end, the greatest inheritance grandparents can leave behind is not their wealth itself, but a framework that enables future generations to use that wealth wisely.
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