The Challenge of Succession in Family Businesses: Insights from an Exclusive Panel

Panama has witnessed the growth and expansion of numerous family businesses that have transcended the country’s borders. However, many of these companies not only face digital transformation and changes in business models, but also the fundamental challenge of remaining relevant through a successful succession between generations.

To address this critical topic, the event titled “The Art of Passing the Torch” was held, where a group of experts from various fields shared their experiences and recommendations on the challenges of succession in family businesses. Among the panelists was our partner, Carla Rojas Pardini, alongside prominent figures such as Roger Castillero, Executive Vice President of Private Banking at EFG Bank, and Aníbal Galindo, General Manager of Impa Doel, S.A. The event was organized by La Prensa and Martesfinanciero.com, and took place on Tuesday, August 27.

Key Takeaways from the Panel on Succession

Aníbal Galindo shared his personal experience, describing how the succession process at Impa Doel, S.A. was accelerated due to a family member’s passing, highlighting the importance of advance planning. Galindo stressed that succession is not an event to leave to chance or allow to happen spontaneously. He emphasized that it is vital to “take the necessary time and approach it with a clear mind,” ensuring the selection of the right leader—someone who understands the responsibility of preserving the family and business legacy.

In his remarks, Roger Castillero highlighted the importance of effective governance in family businesses to better handle conflicts and crises that may arise during the transition process. He underscored that preparing the future leader is crucial, as they must not only have the commitment but also the necessary skills to preserve both the business legacy and the company’s reputation.

From a legal perspective, Carla Rojas Pardini offered her insights on the importance of the leader’s behavior, both within and outside the organization, for the success of the transition. “It is essential that all stakeholders are aware of what is expected of them, emphasizing that family dynamics can significantly influence the business’s performance and continuity.

The panel made it clear that both financial and legal planning are critical components to ensuring a smooth transition. Both optimal wealth management and establishing clear legal frameworks to guide the behavior of family members and define roles and expectations are crucial to avoid conflicts during the succession process.

Familias Empresariales de Panamá: Strengthening the Local Ecosystem

The event also served as a platform to highlight the work of Familias Empresariales de Panamá, a non-profit organization that brings together more than 35 family businesses, with the goal of reaching 50 members this year. The organization’s president, Wiston Uzcátegui, who moderated the panel, emphasized that business succession is a process that requires years of planning and must go beyond simply choosing a leader, involving the transfer of wealth and the generational legacy.

“Passing the torch is an art that comes with risks,” Uzcátegui noted, explaining that a successful transition requires identifying the future leader and developing their skills, both in business management and in preserving the family legacy.

Conclusion

Succession in family businesses is one of the biggest challenges these companies face in their quest to remain relevant across generations. In this context, the perspectives shared by the experts on the panel highlighted the importance of strong governance, strategic planning, and the fundamental role played by both financial and legal aspects.

At Quijano & Associates, we are committed to supporting family businesses through this process, providing the legal advice necessary to ensure the torch is passed successfully from one generation to the next, guaranteeing the continuity and preservation of the family legacy.

As part of our professional team, the event was also attended by our senior associate, Luis Miguel Rojer Abadía; associate, Natalia De Obaldía and our Business & Marketing Manager, Sofía Johnson.

Shall you would like to know more about the scope of our services, please do not hesitate to contact us at quijano@quijano.com