'Succession': The truth behind those boardroom manoeuvres
In the HBO Max/Crave show, the billionaire patriarch wants to sell the company, so his kids rally to access their power within a voting trust. A corporate lawyer picks apart the depiction of voting trusts
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In the Emmy-award-winning HBO Max/Crave show Succession, created, written and directed by Jesse Armstrong, aging patriarch Logan Roy and his family plot and scheme against shareholders and each other as they maintain control over their international media conglomerate Waystar Royco. In this series, experts examine how much the show gets right in the area of succession planning, deal making and breaking, and personal relationships within family enterprises.
“It’s very compelling – and it really seems to have caught the public’s attention,” says Peter Jaskiewicz, Academic Director of the Family Enterprise Legacy Institute (FELI) and co-author of the recently published book Enabling Next Generation Legacies: 35 Questions that Next Generation Members in Enterprising Families Ask. He is a full professor at the Telfer School of Management, University of Ottawa, and the University Research Chair in Enduring Entrepreneurship.
“But the downside is that viewers start to believe this is how all family businesses operate, and that is simply not the case. There are a lot of amazing families out there that have stewarded their businesses through multiple generations and are doing tremendous work.
“In terms of how realistic it is, of course it’s fiction,” adds Jaskiewicz, “and some aspects are hyper-dramatized, but the reality is that there are some business-owning families that are quite similar to the Roys and are dysfunctional as a family (within and across generations), as family business leaders (in the top management team), and as family owners (on the board). With so many different interests and personalities, conflicts can erupt, grow and spill over into every detail of their personal, family and professional lives.”
In the final episode of Succession’s third season, Logan Roy makes a hasty decision to sell the conglomerate without informing his children, each of whom believes themselves to be part of Logan’s succession plan. When they get wind of their father’s betrayal, the siblings form an alliance, despite years of vicious competition, to access their power within a voting trust.
Andrew Bourns a corporate lawyer and partner with Dentons, takes a look at the story arch in the season finale to point out how much makes sense in reel vs. real life.
What is a voting trust and how might a patriarch or matriarch involve their kids?
“A voting trust is a contract under which a registered holder of shares authorizes another party, a voting trustee, to vote the registered holder’s shares.
“Commonly, the voting trust agreement authorizes the voting trustee to vote the shares as the voting trustee sees fit in the voting trustee’s own discretion – this has the practical effect of removing the registered shareholder’s voting rights with regard to the shares that are subject to the voting trust.
“Voting trusts can have a virtually indeterminate duration or may be limited in terms of how long they remain in effect – for instance, families may implement voting trusts for minor shareholders that terminate when the minor reaches a certain specified age. Voting trusts may also be granted in relation to all voting rights attaching to the subject shares or, alternatively, only voting rights in relation to certain specified matters.”
In the show, the patriarch goes behind his children’s back to sell the company. Is that realistic, in terms of last-minute decision-making overriding a succession plan?
“Obviously, a spur-of-the-moment decision to sell a publicly-listed family empire is an extreme example of last-minute and unilateral decision-making in succession planning.
“In the vast majority of cases, succession planning is undertaken in a much more deliberative and consultative manner. However, it is realistic and relatively common for the patriarch and/or matriarch of a family business to retain control over the family business until they die or become incapacitated – so it is entirely realistic that the patriarch and matriarch of a family would retain the ability to make last-minute decisions with regard to succession planning, even if that rarely results in the type of drama portrayed on Succession.”
If a patriarch or matriarch did make such a decision, would their kids and ex-spouse have any say in the matter if they were part of the voting trust?
“That’s difficult to say. It would depend on the terms of the voting trust and the particular circumstances in which the voting trust is relied upon by a voting trustee.”
As a corporate lawyer who works in succession planning, would you discourage a patriarch or matriarch from doing such a thing?
“That’s a tough one. I can’t speak specifically to the Roy family’s circumstances or the fictitious business decisions that were made, but in real life, success in the succession planning process (where success is measured by the preservation of family wealth and the minimization of future disputes and infighting) is most reliably achieved by taking a methodical and deliberative approach that includes and considers the perspectives, goals and objectives of both the older and younger generations within a family.
“Logan’s approach to succession planning seems like it may ultimately fall short both with regard to preserving family wealth and minimizing future conflict – I guess we will find out.”
Responses have been lightly edited for clarity and length.
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