It's a balancing act between developing family heirs and maintaining performance standards across an organisation
Family-owned businesses in Asia face a unique tension: preserving tradition while modernizing leadership to stay competitive.
Daniel Soh, sector leader, Asian Conglomerates for Korn Ferry, has seen how this plays out and the role CHROs must play in ensuring succession doesn’t fracture an organization.
“CHROs play a critical, strategic role in balancing the development of family heirs with the need to maintain fairness, morale and performance standards across the organization,” he says.
The pressure is intense. Across much of Asia, passing leadership to the next generation is often seen as a given, but companies also face the need to professionalize how they’re run. Heirs can’t just step into senior roles – they must prove their worth. According to Soh, CHROs can create structured pathways that hold successors accountable to clear, measurable standards.
“Define clear competencies – leadership, financial acumen, people management, industry knowledge – that every leader, including heirs, must master. This depersonalizes development and signals that heirs are held to the same standards as others,” he explains.
Rotational assignments are another way to demonstrate merit, he says. Such moves not only build competence but also show non-family executives that succession isn’t automatic. To reinforce fairness, Soh stresses the importance of shared opportunities.
“Place heirs in different business units – operations, finance, marketing, HR – with accountability for results,” Soh says. “Advanced leadership development programs for both heirs and non-family senior leaders provide growth without favoritism,” he says.
Balancing objectivity with family values
Independent validation is one way to ensure heirs are judged on achievements, not their last name.
“The crux is objectivity,” Soh says. “Ensuring that the heir’s development and assessment mirror what would be expected of any senior leader, with mechanisms that emphasize transparency and fairness," he said.
“Formal assessment can help ensure heirs demonstrate readiness by earning credibility through measurable achievements, not merely inheriting it."
However, balancing cultural values with professional standards remains one of the hardest challenges for CHROs.
“That’s pretty much the heart of what often makes succession planning in family-owned businesses in Asia so complex,” Soh says. “It isn’t just about capability, but also about reconciling family values – legacy, loyalty, continuity – with professional values – meritocracy, fairness, strategy.”
He points out that HR leaders are uniquely positioned to bridge the divide by codifying family ethos into business principles and ensuring governance mechanisms protect fairness. But these structures mean little if communication breaks down.
“This is often a delicate but critical dimension of succession planning,” Soh says. “It is very critical in ensuring both family stakeholders and professional managers feel heard, respected, and fairly evaluated. When communication breaks down or evaluation is seen as biased, succession transitions often fail.”
Avoiding pitfalls through process and transparency
For CHROs, the solution lies in combining structured governance with culturally sensitive dialogue, Soh says.
“CHROs can foster open communication and fair evaluation by combining structured governance, neutral facilitation, objective tools, and culturally sensitive dialogue particularly in the Asian context,” he explains.
There are also common missteps that CHROs must anticipate. Succession too often gets treated as an event rather than a process, which creates chaos.
“Families sometimes announce successors suddenly, leaving little time for skill-building or acceptance,” Soh says. “CHROs can frame succession as a multi-year journey (often 3–5 years), with phased responsibilities, developmental milestones and transparent communication.”
Additionally, resistance from senior family members unwilling to let go and younger heirs. The push for modernization often clashes with tradition, leading to stalemates. Soh says CHROs can step in as mediators, translating family values into formal governance policies and establishing structured platforms – such as family councils or succession committees – for constructive dialogue.
“When succession is treated as a family secret, it leaves non-family employees anxious and disengaged. This fuels rumours of favouritism and destabilizes morale,” Soh explains.
Integrating succession with strategy and global pressures
Succession planning, in Soh's view, cannot be siloed. Linking succession to leadership development, diversity and inclusion, and mobility frameworks makes the process both credible and sustainable.
“Succession planning in family-owned businesses particularly in Asia often gets treated as a narrow exercise (ultimately, who takes over the family seat), when in reality it should sit inside the broader HR strategy,” Soh says.
“Succession planning is strongest when it’s not isolated, but woven into HR’s core strategies – leadership pipelines, D&I initiatives and mobility frameworks."
Emerging global trends are complicating matters further. From digital transformation to ESG pressures, heirs face challenges their parents never encountered.
“Broader global trends are reshaping what it means to be a credible successor in family-owned businesses, particularly in Asia where tradition and modernization often collide,” Soh says. “Succession today isn’t just about who ‘inherits the chair.’ It’s about who can credibly lead in a digital-first, ESG-conscious, globally integrated, and purpose-driven world,” he explains.
For CHROs, that means updating competency frameworks to include digital and ESG skills, designing blended learning paths, and reinforcing transparency in governance. But these changes, he adds, must be framed in ways that respect family culture.
“Frame these changes in family language – stewardship, legacy, continuity – so adaptation doesn’t feel like cultural erosion,” he says.
