Although the juicy in-fighting and back-biting of Logan Roy and his scheming Succession family (allegedly based on the inside drama of the American Murdoch family) made for popular TV, in the real succession planning process, in the real Calgary business world, it is a much more practical, structured and strategizing story.
“Succession planning in family businesses is slowly improving as organizations increasingly recognize their critical role in ensuring stability and leadership continuity across generations,” explains Chris Gandhu, partner and family office leader (Calgary) with KPMG Canada. “We do see more businesses adopting formal processes, nurturing future leaders within the family, seeking outside expertise, and making succession efforts more intentional and effective.
“Families who have the courage to approach this option transparently and pragmatically often find it an effective way to ensure their legacy thrives.”
Like the fictional TV series, iconic recent succession stories like Walmart, Ford and the $30-billion succession commotion surrounding Rogers Communication are high profile examples.
In real Calgary business, there are complex and critical options to consider, but most Calgary businesses handle succession under the radar.
According to Calgary’s Peter Harris, private market leader for Alberta and the Prairies with PwC Canada, “Succession planning is critical today because businesses face unprecedented complexity, rapid technological change and generational shifts in leadership expectations. Effective succession planning ensures continuity, mitigates risk, and preserves both business and family legacy.
“But without a clear plan, companies risk instability during leadership transitions, especially in family-owned enterprises where emotional and relational dynamics are deeply intertwined.”
While the business-is-business cliches apply and an unavoidable part of a business’ succession is invariably personal, Harris highlights some basics. “Effective succession planning requires attention to leadership readiness and potential, governance structures, establishing clear roles, responsibilities and decision-making frameworks, emergency planning to preparing for unforeseen situations, stakeholder alignment and engaging family members, board members and key executives in the planning process and talent pipeline development to build and nurture internal talent pools with succession in mind.”
Common mistakes in succession planning – like procrastination, informal planning, ignoring emotional dynamics and failing to prepare successors – can be avoided with structured planning and early engagement.
As with conventional succession plans and new options like Stock Ownership Plans (ESOPs) and Employee Ownership Trusts (EOTs), it inevitably gets personal, involving the pride and emotions of a founder, their family and legacy!
“Particularly in a family business, succession is never just a business handoff,” Gandhu points out. “It is a family transition. Personal dynamics, sibling relationships and even unspoken expectations shape how well a plan will work. Families who treat succession only as a legal or tax exercise often find the paperwork is airtight, but the relationships are fractured.”
He adds that, for most founders, the business is not just an asset. It is a vessel for their identity, value and life’s work. Ignoring the emotional side of succession is like ignoring gravity. It will pull everything down eventually.
Legacy isn’t just about preserving wealth or the company name. It is about passing along purpose, responsibility and pride of ownership.
“The business doesn’t just need successors; it needs a family that can stay aligned long enough to support that successor. The best tool families have is structured dialogue. Creating safe spaces to surface concerns, talk about roles and align on shared values.”
Chris Gandhu mentions that, too often, families only meet around the boardroom table or the dinner table, and neither is designed for honest conversations about business topics like legacy and leadership.
Increasingly, the succession planning process – identifying critical positions, assessing high-potential employees, and developing their skills to ensure a smooth leadership transition and continuity for the organization when the founder or leader leaves or retires – is also being redefined.
Employee Stock Ownership Plans (ESOPs) and Employee Ownership Trusts (EOTs) are relatively recent alternatives, or compliments, to succession planning.
For owners considering succession, ESOPs continue to offer compelling advantages. PwC’s Peter Harris explains that ESOPs are gaining traction as succession tools, especially for owners seeking to exit while preserving company culture.
“There are pros and cons. ESOPs can boost employee engagement, offer tax advantages and ensure continuity, but they also require careful structuring, regulatory compliance and may not suit all business models. We are seeing increasing interest, particularly in mid-sized enterprises and professional services, where retaining talent and legacy are priorities.”
They are similar but different strategic tools for business succession. The key difference is that succession planning includes various strategies (selling to family, external buyers or employees). ESOPs and EOTs are formulas for achieving efficient employee-owned succession.
An EOT differs from a traditional ESOP in that ownership is placed in a trust for the benefit of employees, rather than being held directly by individual employees. It is an effective way to maintain the company’s legacy and culture, offer tax savings and protect local jobs.
Many financial planners and succession planning experts suggest reasons why Canada newly passed (2024) legislation enables and encourages the formation of EOTs.
Stats show that 76 per cent of Canadian business owners plan to exit within the next decade, representing $2 trillion in business assets, yet fewer than 10 per cent have a formal succession plan.
Unlike other countries (U.S. and U.K.), Canada lacked a straightforward path for owners to sell to their employees. With the introduction of the EOT legal structure and incentives, business owners can now choose to sell their business to the people who helped build it.
EOTs are distinct because other forms of employee ownership benefit only a small number of employees, typically management. EOTs turn every current and future employee into an owner, by requiring a majority (51 per cent) of the company to be sold to employees, not just a small stake, so employees benefit in a meaningful way. And employees do not pay for their shares, making EOTs very accessible.
Both are popular strategies for business continuity and transition after a founder or owner leaves. And, like conventional succession, they both offer a transformative alternative to traditional ownership transfers, by empowering employees as owners and securing a lasting business legacy.
Calgary’s SkyFire Energy designs and builds solar projects of all scales, from residential through to commercial and utility scale solar projects across Western Canada. It is also a dynamic Calgary example of the success potential of employee ownership.
“We formed our ESOP back in 2018, because we wanted to make sure that individuals that had an entrepreneurial spirit and an owner’s mindset had a place within SkyFire,” says the enthusiastic David Vonesch, CEO and president, director and employee owner. “We’re a broad-based ESOP, meaning that all employees in our business have an opportunity to invest in the company, and we wanted to reward our employees for their hard work and make sure that people could see a long-term opportunity with our business.”
He is revved about the Canadian momentum of succession by employee ownership, and the new EOT legislation positively impacting businesses in Calgary.
“The EOT tax benefits that are now available to businesses to transition to a majority owned employee-owned business are substantive. It is a significant opportunity and motivator for those business owners to take a hard look at employee ownership and not having to compromise legacy versus financial outcomes. You can have both.”
Vonesch underscores that there’s a lot of excitement and buzz around the opportunity for businesses to become employee owned or lean into their employee ownership models. “I don’t think there has ever been a more exciting time for employee ownership in Canada. And that buzz is palpable.”