CHINA Trends and Developments Contributed by: Jun Zhang, Xiaochu Zhang, Yifan Lai and Wan Hu, Beijing Dacheng Law Offices, LLP
avoidance, folk taboos and overly ambitious visions are the core reasons that deserve primary attention. Overconfidence Confidence is an essential quality for successful entre - preneurs. The ups and downs they have experienced prove the capabilities of family (business) leaders. The confidence of successful entrepreneurs is inevitable and necessary; it can even be said to be an important aspect of the entrepreneurial spirit. However, the experience of continuous past success often makes a considerable proportion of entrepre - neurs overly confident in their own abilities. They tend to believe they are wise, omniscient and omnipotent, almost infallible. Moreover, entrepreneurs are also overly confident in the emotions, character, rationality, wisdom, capabilities and vision of their family mem - bers. Coupled with confidence in their own health, they wish they could live another five hundred years. As a result, a certain proportion of entrepreneurs believe there is no need to make succession plans and arrangements prematurely. We have encountered several entrepreneurs over the age of 70 who were sur - prisingly still convinced that it was too early to do so. Avoidance Everyone is influenced by individual cognition, per - sonality, emotions and regional culture, which is self- evident. In family succession planning, we must con - sider not only the practical possibility of the family’s long-term prosperity and the realisation of its vision but also complex influencing factors such as emo - tions, closeness, preferences, gender, age, endow - ments, capabilities, conditions and the environment. Especially in families with complex blood relation - ships, there are also well-known complicated family relationship issues. Succession planning and arrangements inevitably touch on core and sensitive family issues, leading to enormous emotional, interest and cultural conflicts. It is often a situation that triggers conflicts as soon as arrangements are made. Faced with wavering posi - tions, inner struggles and difficult choices, entrepre - neurs’ helpless postponement or choice of avoidance
is an important reason for the lack of succession plan - ning and arrangements. Some people claim that contemporary entrepreneurs are “collectively avoiding” succession planning and arrangements, which is certainly an exaggeration. We have seen some entrepreneurs explore, strive for and achieve results in succession planning and arrange - ments. However, a considerable proportion of entre - preneurs indeed do nothing about it. Folk taboo Succession planning and arrangements should be pri - marily made during one’s lifetime and supplemented by posthumous arrangements. However, some entre - preneurs only regard them as posthumous affairs, and a certain proportion believe that talking about and arranging posthumous matters is unlucky, inauspi - cious and taboo. This is a very important issue. We find that some entrepreneurs, even when they are in poor health or seriously ill for a long time and have ample time and conditions to make necessary plans and arrangements, do exactly the opposite. In the end, they do not even make a will, and folk taboos are likely the most important reason. Such examples are everywhere. At the same time, although younger family members may have the necessary awareness, they also believe that mentioning such matters is a sign of “great unfilial piety” or “disrespect”, or will affect the emotions of the elder family members. They dare not or are unwilling to raise the topic, and the final result can only be left to fate, with no alternative. Overly ambitious vision Entrepreneurs have strong aspirations, which is the key to their success. They have high expectations for the sustainable development and systematic succes - sion of their family (business). Some entrepreneurs may have realised the importance of succession plan - ning and arrangements. They often start with formu - lating a family constitution and establishing a family office, expecting to systematically solve all problems of family (business) protection, management and suc - cession in one go.
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