How boards can turn confidence into long-term resilience

New Zealand family businesses have long drawn strength from resilience, shared values and deep community ties. These qualities remain important.

Dana Hussey

However, our KPMG New Zealand family business report 2026 suggests the operating environment is expected to become tougher, and these strengths alone may not be enough to sustain performance over the next decade.

For boards, that puts greater weight on governance, succession, capital allocation, professional leadership and technology. The following insights from the report highlight where boards can have the greatest influence on the long-term success of family businesses.

Why family strengths need stronger governance structures

New Zealand family businesses remain confident in the future, with 88% reporting a clear strategic direction for the next 10 years. However, that confidence is tempered by a more cautious outlook, with 51% expecting growth to become harder over the next decade.

As family businesses grow, the informal relationships and shared understanding that once supported fast, aligned decisions can come under pressure. Greater scale and complexity call for clearer structures around how decisions are made, responsibilities are assigned and different perspectives are heard.

The board can provide the challenge, accountability and independent perspective that will become more important throughout this growth journey.

A key consideration for boards is whether governance arrangements are keeping pace with the business, challenge the trade-offs between financial performance and family priorities, and strengthen the processes needed to support sustainable growth.

Challenging traditional thinking on growth, capital and investment

New Zealand family businesses remain ambitious about growth, with geographic expansion, diversifying customer bases and products among the key priorities for the next decade.

Most family businesses intend to self-fund, with 85% planning to reinvest earnings and shareholder equity to support their growth ambitions. That approach can preserve family influence and support resilience, but it may also limit the ability to scale, enter new markets or accelerate investment.

A key question for boards is whether current funding preferences are limiting the strategy. This may call for broader consideration of capital options to ensure growth ambitions are backed by the resources needed to deliver them.

Making succession a standing board priority

Succession and next-generation readiness are now the leading long-term concern for New Zealand family businesses, identified by 39% of respondents. Yet only 3% of current owners are highly confident the next generation is ready to assume responsibility in the business.

Succession needs to be treated as an ongoing governance and capability-building process. Informal learning and on-the-job experience may not be enough to prepare future leaders for a larger or more complex business. External development opportunities and broader leadership experience can help build the capability required.

The most successful transitions are likely to be those where succession is treated as an ongoing development journey, ensuring governance structures balance continuity with change.

Succession is increasingly a board-level strategic issue, requiring ongoing conversations about future ownership and leadership needs, the capabilities the business will require, and the development pathways needed to build them.

Supporting the evolution towards professional management

The report signals a significant shift in how respondents expect their businesses to operate. While 57% currently describe their business as a family-run operating business, this is expected to fall to 8% by 2035. Over the same period, professional management is expected to increase.

This shift reflects the growing capability required to deliver on future growth ambitions. In some cases, family members may not have all the specialist skills required for the next stage of growth, creating a need to attract and empower external leaders.

Successfully navigating this transition will require boards to empower external leaders, prepare both the business and the family by clarifying roles, and create space for open conversations about the shift from operational involvement to governance and ownership.

Providing governance focus for AI adoption

Artificial intelligence (AI) is a rising priority. The report notes 43% of respondents identify AI adoption and governance as their top short-term challenge, while only 10% have implemented AI at scale.

The gap between ambition and implementation suggests many family businesses recognise AI’s potential but are still working out where it can create practical value and support growth.

Many respondents are researching or piloting AI across multiple use cases and parts of their organisation. Without clear priorities, that activity can consume investment and dilute the value or impact returns. 

The role for boards will be to set clear priorities for AI investment, test how proposed use cases support the long-term strategy and establish the governance frameworks needed to scale those that prove their value.

Where confidence meets governance

The message from the report is clear: New Zealand family businesses are entering the next decade with confidence, ambition and strong foundations.

Sustaining that position, however, will require deliberate decisions about governance, growth, succession, leadership and AI as the operating environment becomes more complex.

This is where confidence meets governance. Through independent challenge, disciplined decision-making and clear strategic oversight, boards can help family businesses make sound decisions and build long-term resilience.