When the BRW Rich 200 edition is released this week, two things will be noticeable.
Firstly, there are likely to be relatively few big increases in wealth, save for Gina Rinehart. It’s been a tough year for most entrepreneurs who aren’t in mining and that should be reflected in the valuations.
The other noticeable thing will be how the list is dominated by a big group of ageing men – and yes, they are mainly men – who are being forced to confront the issue of succession.
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While older Rich List members such as Frank Lowy and David Hains have put clear and well-articulated succession plans in place, the situation is less clear for the likes of Harry Triguboff, Kerry Stokes and even Gerry Harvey. They may have plans, but they haven’t made them clear to the market yet.
If any of these men want a textbook example of how to run a succession strategy, they should look to Melbourne property developer Bruno Grollo, who has now put the final pieces of his plan in to place, with son Daniel formally taking over the family’s construction giant, Grocon.
Bruno and his other children, Adam and Leeanna, will share a portfolio of property and almost-completed projects, including, according to the Australian Financial Review, a 50% stake in the QV Centre in Melbourne, an office development in Dandenong, and a mixed-use project now underway in Footscray.
Daniel gets the Grocon operating business – and its portfolio of big projects, including an $800 million office tower in Sydney and a $180 million tower in Melbourne.
The handover, completed this month, appears to be have been handled very smoothly.
While Daniel has been in charge at Grocon for a number of years, the formal splitting of Bruno’s empire has occurred before any sudden succession issues could crop up. Everyone in the family knows where they stand.
Just as importantly, everyone in the market knows where they stand. Bruno first announced his intentions to split the family business in April last year, giving staff, customers, suppliers and other stakeholders plenty of time to understand how the transition would work.
Daniel’s announcement today that he is now in control of the business is another step in that handover. From here on in, it’s business as usual.
It’s obviously crucial that a good succession plan is clear in the minds of all internal stakeholders. But the way the Grollos have communicated with the market through the media has also been very effective.
It’s a tactic used also by the Pratt family. Well before Richard Pratt died, he famously laid out his succession plan to BRW, right down to how his daughter with Shari-Lee Hitchcock would be looked after.
Will we have some more succession plans laid out in this week’s Rich 200? We’ll have to wait and see, but the Grollo family certainly stand out as model worth following.