Reinventing Tradition: A new era of succession planning
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Castle Howard, one of England’s most storied estates, has long been synonymous with tradition and continuity. For generations, such estates have typically passed from father to son, a custom rooted in the principle of primogeniture.
However, this deeply ingrained tradition is facing scrutiny as George Howard, the current incumbent owner of Castle Howard, is reported to be breaking convention by requiring his son, along with four cousins and a half-sister, to compete in formal job interviews to determine the next heir. This unusual approach highlights the importance of succession planning and how families might need to adapt traditional practices in response to modern challenges.
The traditional approach
The longstanding concept of primogeniture, where the eldest child inherits, provides a clear line of succession. Clarity and certainty have their advantages. By knowing their future from birth, heirs can be carefully prepared to manage an estate’s complex operations. For the wider family, such as younger siblings, primogeniture has the benefit of managing expectations from the outset. Everyone is aware of their position and can plan their lives accordingly. The trade-off between the prestige but equal burden of custodianship and the freedom to follow your own path has generally been a harmonious one within families for generations. This certainty within the family ensures the estate’s long-term stability. In a sense, following tradition means that no-one in the family can be blamed for getting it wrong and no-one can feel that their wills or desires have been overlooked.
However, the traditional approach has been criticised. In a modern world where values such as meritocracy, equality, and individual capability are increasingly emphasised, primogeniture can feel outdated and inflexible as a concept. The pressure placed on a single heir to live up to expectations can be overwhelming – they may not want to inherit. Similarly there can be a sense of resentment from siblings or other family members who might feel excluded. Seeking to take counsel and involve others in decision making processes can sometimes be helpful, but can create a noisy environment in which those who have been consulted have a different view.
Merit-based succession
George Howard’s decision to involve multiple family members in a competitive selection process, in theory, allows for the identification of the most capable individual, regardless of their birth order or gender. By conducting formal interviews and assessments, families can ensure that the next generation of leadership is not only prepared but also genuinely motivated to take on the role. It is not known how independent this appraisal is, or realistically can be. The process creates the challenge of how the selected heir will then be appraised over time, and who would carry out that appraisal of performance and against what criteria, or whether there is then no review once the decision has been made. If there is no review process the one wonders whether those family members who have not been selected will be happy to stay silent for their lifetime, and whether their children will be eligible for the next succession.
Other alternative models have seen estate owners create companies or trusts where trustees can manage the estate and pay benefits to shareholders or a range of beneficiaries. The perceived benefit of trust ownership is that trustees are a continuing body of persons who can manage the assets for a range of beneficiaries. But this is not a complete solution either as trustees will want to take guidance on strategy from the family and so governance around a family council and owners forum will still be required.
Adapting to the needs of the new generation
Regardless of what approach is adopted to succession, family governance and management of expectations remains extremely important and families will need to ensure the governance framework is set out clearly, whether that is through the use of trusts or via forms of family constitution or family charter.
With the increasing complexity of managing large estates, the next generation is recognising the importance of professionalising their approach to succession. Many estates in single ownership now operate advisory boards, working hard to run the estate as a well-governed business. There is also an increased desire from estates for engagement with local communities adopting business models that allow public access and enjoyment of the estate for leisure and tourism.
While the preservation of family heritage is important, there is also a growing recognition from younger estate owners of the need to adapt to changing social norms and economic realities. This often involves diversifying estate income streams and embracing sustainable practices.
By embracing these changes, the next generation of estate owners can ensure that their legacies are preserved for generations to come, while also adapting to the demands of the modern world.
This article was first published in PrimeResi in August 2024.
