When thinking about succession planning, it’s easy to paint a picture of something out of HBO’s Succession — sibling rivalry, a founder stepping aside, and the chosen one emerging.

In reality, succession planning in luxury is typically slow, deliberately opaque, and much less theatrical. Yet, it remains one of the most strategically sensitive issues, especially in luxury, where the goal is for a heritage brand to outlive its founders by centuries. “The exercise requires anticipating the company’s future strategic needs, and therefore goes far beyond simply selecting a competent new leader,” says Erell Bauduin, private client partner at law firm Charles Russell Speechlys. “This topic is naturally at the heart of investor expectations. Investors need visibility on the stability of governance and often raise the subject at general meetings, frequently, with a measure of concern.”

In January, investors pressured LVMH for clarity on its succession plan for 76-year-old founder, chair and CEO Bernard Arnault, per Reuters. Also in January, Moncler Group’s Remo Ruffini put the wheels in motion for his succession plan, appointing Bottega Veneta’s Bartolomeo Rongone to take over as CEO, while Ruffini transitions to executive chairperson. In September 2025, Giorgio Armani’s succession plan — which had been kept under wraps until his will was read — revealed his wishes for his heirs to offload a stake, with the business eventually being sold to a strategic or going public.

LVMH’s Arnault family: Frédéric, Delphine, Antoine, Bernard, Helene and Alexandre.

Photo: Chesnot/ Getty Images

Clearly, there is no single model for a succession plan. The approach a company takes is shaped by its ownership structure, governance framework, the size and nature of the business, market conditions, and the extent to which a founding family remains involved in its management.

Diagnosing the problem

Before deciding who should succeed the CEO, boards need to be clear about what kind of succession challenge they are facing, experts say. The approach differs fundamentally depending on whether a company is founder-led, family-influenced, publicly listed, or privately owned.

In founder-centric organizations, succession risk is often about overreliance on a single individual, rather than the absence of talent. In publicly listed groups with strong family influence — such as LVMH or Kering — the challenge is balancing long-term control with market expectations around transparency and governance. In private, family-owned businesses, succession is as much about managing family dynamics as it is about leadership capability.

There are many misconceptions about what constitutes a family business, says Cécile de Lisle, executive director of French business school HEC Paris’s Family Business Center. The definition in the EU is that the family must have the majority of voting rights and an involvement of at least one family member in governance, otherwise the family must own at least 25% of voting rights, she says. By this definition, several of luxury’s largest groups — including LVMH and Kering — are not technically family businesses, despite their founding families’ influence. Ferragamo would be a more accurate example of a truly family-owned business.

For smaller and mid-sized businesses, the lesson remains the same: succession planning should start with an assessment of where decision-making power sits, and whether the organization is developing leaders who could adopt that responsibility.

Building the pipeline

The biggest mistake companies make is looking at succession exclusively from the top, while ignoring all the development that goes on behind that appointment. “People think that CEO succession planning is about deciding who gets the three letters C, E and O,” says Jane Edison Stevenson, global vice chair of the board and CEO services for organizational consultancy Korn Ferry. She argues that companies should always cultivate multiple viable options. “The illusion is that there’s one white knight or fair princess, and that just isn’t the case.”

Boards should aim for progression planning, Stevenson continues. Rather than asking who the next CEO will be, boards increasingly focus on what capabilities the business will need, and whether those capabilities exist or can be developed within the organization.

There are a handful of strategically relevant positions that build credibility, experience and judgment — which Stevenson calls “critical pass-through roles”. “You only have so many roles that are good training grounds for CEO leadership,” she says. “There are usually two or three, or a maximum of five positions in a company that build credibility. If you don’t have those experiences, you don’t get in the consideration set.”

In luxury fashion, those roles often include positions with direct P&L responsibility and deep exposure to product — such as divisional leadership or merchandising-led roles — alongside operational expertise. Crucially, these roles need to be identified years in advance. “The educational value of a role is not going to be meaningful if it’s only for a year.”

This thinking applies just as much to smaller businesses as global groups. Rather than asking who the next CEO should be, founders and boards can ask which roles inside the company actually prepare someone to run it — and who is getting access to those roles today. That question becomes even more complex when ownership and leadership overlap.

The heir vs the outsider

Family succession tends to work best when governance is formalized early and expectations are managed long before any appointments. This often takes the form of a family council or charter that sets out values and decision-making rules around ownership, leadership, and succession.

Clear rules are important to avoid tensions: defining the path for the potential heir; setting certain goals they must achieve before ascending; rules for recruitment of family members versus non-family members; and how to allocate capital or shares across the family. “It’s easier for the head of the family to say, ‘I have a clear view of the company and my children, and this is the one I choose, and it’s not up for discussion,’ but that often opens up conflicts in the long term, especially if other siblings stay in the ownership of the company [but are not managing it],” says de Lisle. To mitigate this, more families are bringing in external council members to add neutrality to the process.

For publicly listed luxury groups, succession planning often looks different. While founding families may retain significant influence through voting rights or board positions, leadership appointments are shaped by investor expectations, disclosure rules, and market scrutiny. For Bernstein luxury goods analyst Luca Solca, looking externally is usually a more attractive option. “Succession within the family is less than ideal, because it limits the options available: if you accept external succession, you have the whole world to choose from — if succession must happen within the family, then the number of candidates is smaller and finite,” he says.

In other cases, a company may appoint an external executive while waiting for a family member to mature into the role. Prada Group offers a prominent example: the appointment of Andrea Guerra as group CEO was explicitly framed as part of a longer-term succession pathway for heir Lorenzo Bertelli.

Prada Group’s Lorenzo Bertelli, Patrizio Bertelli and Miuccia Prada.

Photo: Simona Granati - Corbis/ Getty Images

Communicating the succession plan

How and when succession plans are communicated is one of the most delicate aspects of the process. Bauduin notes that the French Financial Markets Authority sanctions the concealment of a foreseeable change of control or misleading information about the stability of a company’s shareholding structure. At the same time, “striking the right balance between trust and preserving the confidentiality of information is delicate”, she says, particularly for public companies navigating investor expectations.

If a succession plan is going to be disclosed, it would be through regulatory filings or shareholder meetings — but often, the plan is kept deliberately vague. “It would be the rare situation that a company would announce succession plans — and it may be inappropriate, because things change, the business strategy changes, the global landscape changes,” says Stevenson. “What works very well is when the street understands and there’s a clear sense of the talent within the organization.”

The most effective way to maintain confidence is not through announcements, but through performance, she continues. “The best way is through results and highlighting multiple players in the investor conversations, so there’s an awareness that multiple players are building the future of the company.”

Most family businesses globally are small or medium-sized enterprises, not global luxury groups. But the principles behind successful succession planning translate: identifying leadership capabilities early, formalizing decision-making processes, and separating ownership from management where possible.

Whether a company plans to stay family-run, bring in external leadership, or eventually sell up, succession planning is ultimately about protecting the business from disruption. “As time goes by — and nothing and nobody is forever — this succession question becomes more important,” says Solca.