Episode 71: Rebecca Gooch on Succession Planning and the Family Enterprise Boom

R. Adam Smith 00:13 Welcome to the Family Business Audiocast on LinkedIn. I am R. Adam Smith, creator of this Audiocast series.

As an entrepreneur, investor, founder, investment banker, and board leader the last 25 years, I'm fortunate for my many experiences within the family firm industry. A brief comment on why I created this broadcast: private companies are a passion of mine. Having grown up in a family of entrepreneurs and having engaged for two decades in deals, strategic transformations, investments, and boards with an array of fascinating family enterprises, family firms, and family offices, I founded this series to offer a useful platform for listeners to hear from veterans, academics, and leaders in the vast family firm ecosystem.

R. Adam Smith 00:53 Whether you're a family business owner, building, running, or advising a family office, or just expanding your family office activities, I hope these conversations are useful and enlightening. Now it's time to turn our attention to our accomplished guests on today's episode. Welcome to the Family Business Audiocast on LinkedIn.

I am R. Adam Smith, creator of this Audiocast series. And a warm thank you to our live audience on LinkedIn today and for those listening in the future. R.

Adam Smith 01:17 I am very pleased today to welcome Rebecca Gooch, who is Global Head of Insights at Deloitte Private. It's wonderful to have you here today, Rebecca. We've been talking for a while and finally have you on the podcast. Rebecca Gooch 01:17 Delighted to be here.

Thanks so much for having me, for sure. R. Adam Smith 01:31 Absolutely. We'll talk about you a bit, then we'll jump in.

So Dr. Gooch focuses on global research and thought leadership and runs that business at Deloitte surrounding family enterprises, family offices, succession planning, governance, private capital, and the evolving multi-generational wealth landscape. Rebecca is very active in the business and on LinkedIn and does a wonderful job, and it's great to have her here today. Through Deloitte Private's global research initiatives, she works closely with family enterprises and family offices to better understand the trends, risks, and opportunities that shape the future of long-duration businesses and also wealth stewardship worldwide.

R. Adam Smith 02:12 So our conversation comes obviously at a very pivotal moment. Family enterprises are navigating one of the most consequential periods in modern economic history. There's generational transition, geopolitical uncertainty of course, technological disruption and risks, and the rapid institutionalization of private capital.

Rebecca brings a unique, very talented global perspective into how sophisticated families are adapting to this era. I'm delighted to have her here today. R. Adam Smith 02:42 You ready to get started, Rebecca?

Rebecca Gooch 02:42 Yeah. R. Adam Smith 02:42 Fantastic. First we'll talk about the rise of the modern family office.

We cover the modern family office on the podcast. R. Adam Smith 02:53 Often in the family enterprise, we've discussed this institutionalization and the modernity of it with some of your friends, Alfredo Di Massis and Jim Grubman. Dennis Jaffe is coming up, and others.

There's just a lot of change, and it appears that there's such a rapid growth and organizational change in the industry. Let's talk a bit about how you cover that, and how does your research show this evolution, especially the last couple of years? Rebecca Gooch 03:36 So if we look particularly at the family office arena, we're seeing just absolutely staggering growth. So at the moment, today, we estimate that there are about 9,000 single family offices in the world today.

Rebecca Gooch 03:36 All right. And we're expecting this number to grow to nearly 11,000 by 2030. But if we look at this over time, in about the decade leading up to 2030, between 2019 and 2030, we expect the number of family offices to increase by a staggering 75%. Now, if you think about different sectors or different industries, you would be hard done by to find ones that are growing as quickly as the family office arena.

Now, if you look at the family office arena in its most simplistic form, you can generally say that North America represents the largest and wealthiest family office sector, Europe the oldest, but Asia Pacific the fastest growing. Rebecca Gooch 04:20 And our findings really kind of echo exactly that. So there's about 3,500 single family offices in North America today, about 2,300 in Europe, and about 3,200 in Asia. I remember looking at these figures back in 2017 and 2019, and at the time there were more family offices in Europe than Asia, but Asia's actually surpassed that today.

But it's not only about the number of family offices that's growing, it's really the economic power behind them. Rebecca Gooch 04:50 So if you look at the collective AUM of all family offices globally, it stands at a notable $3.9 trillion today. Now, we are expecting this to grow to $5.

4 trillion by 2030. And sometimes you hear these really large numbers, and it's kind of hard to get your head around what that means in practice. So let me give you an example that I think really helps. Rebecca Gooch 05:17 If we look at, for instance, the entire hedge fund industry, it's worth about $5 trillion today.

So what I'm saying is just the family office arena, which will be reflected by about 11,000 families, we are expecting that arena to have an AUM that surpasses the current value of the entire hedge fund industry by 2030. So that's really, really remarkable in itself. And of the families that own these family offices, we expect their wealth to reach nearly $10 trillion by 2030. So a lot of the growth in this arena is really being backed by a great rise in private wealth around the world.

Rebecca Gooch 05:57 And also, simply put, the growing popularity of family offices as a structure. They're doing a great job at really preserving and growing families' wealth throughout the generations, and so more and more people are leaning on them, and it's creating a real explosion. R. Adam Smith 06:17 Totally agree.

And also the size is also similar to the private equity industry in a way. And people also should, I think, compare the size of the family wealth to the relative size of that wealth in countries. We know that family business wealth is often 50, 60, 70% of an entire country's wealth and GDP, which is important and really reflects the importance of family businesses in general. So talking about the enterprise, however, just to continue on this conversation, again, we've talked about it here, I tend to focus on the enterprise, the overall organization, the broader wealth, not just the organizational structure of the family office.

R. Adam Smith 06:57 It's helpful that you note people need to keep in mind the family office is just the organizational, administrative mechanism and holder of, or deployer of, the wealth, really, from an entity perspective or governance perspective. And the wealth can be obviously two, three times larger than that. So appreciate that stat, just a bit more on the family enterprise itself, and what does that mean in terms of the broader wealth and resources outside the family office?

Rebecca Gooch 07:37 Okay, so as I said, yeah, we're seeing a lot of growth within the family office arena, but we're also seeing it within the family business arena too. So family businesses make up, this is a really interesting finding, they make up 22% of all businesses globally. Now, within our study, we only looked at, as an important caveat, businesses that had revenue of $100 million US or more. So that means there are about 18 and a half thousand of these family businesses today.

So in addition to the proportion of businesses around the world that are family owned, we also expect to see, in terms of growth, the number of family businesses around the world to grow by 22% too, between 2020 and 2030. So particularly within this, we're expecting to see Europe have the fastest growth engine. Rebecca Gooch 08:13 However, interestingly, there's actually more family businesses in Asia than any other region, and that's expected to be the case not only in 2030, but currently.

So that's nearly 8,000 family businesses in Asia today. But I think in addition to this, it's the economic prowess of these businesses that stood out in the findings, and there was one stat in particular that just showed above the rest in terms of interest. Rebecca Gooch 08:39 So we looked at the expected revenue growth of family businesses versus non-family businesses between 2020 and 2030, and we expect family business revenue to increase by 84%. Now, when you compare that to non-family businesses, it's really different.

We're expecting non-family business revenue to grow by just 59%. R. Adam Smith 09:09 Yeah, and we've discussed that particularly on the podcast with, as I mentioned, one of the kings of the industry, Alfredo Di Massis, does a great job in his research and covered actually recently the entrepreneurial growth, or the entrepreneurialism, of family businesses. We also discussed it with Massimo Bau and also Professor Matt Hughes, and I've written about it on familybusiness.

org. I'm really glad you brought that up because it encourages people to really analyze why there is robust growth, or what are the drivers of organizational corporate structure. R. Adam Smith 09:33 Of course, cohesiveness and passion and long-term thinking is important.

And so let's talk about that long-term thinking, talk about this outperformance. What are, let's say, the pros and cons of long-term thinking? How does this long-term thinking work and impact the family businesses, the bigger family businesses, and also how is that a challenge? Rebecca Gooch 10:04 So okay, if you look at family businesses versus non-family businesses in simplistic form, family businesses tend to have a longer-term outlook, particularly like multi-generational family businesses.

So non-family businesses tend to be heavily reliant on quarterly results, whereas oftentimes for family businesses they're thinking years or even generations ahead, and this changes the way they make decisions. So for instance, family businesses tend to invest throughout economic life cycles. So you can have peaks and troughs throughout an economic life cycle, but it might be, let's say we're in an economic lull, and a non-family business might say, hey, do you know what, we really wanted to update our operational technology, or we really wanted to focus on paying into succession planning, but let's just not do that now.

Rebecca Gooch 10:41 Let's put a pause on it and see what happens economically. Family businesses tend to continue to invest throughout the economic cycle, and this can pay dividends in the long run. We also see a lot of family businesses, because they are family led, tend to be more aligned in terms of who their ownership is and who their leadership is. They tend to both be family members, and that means that they can operate in a different way.

Rebecca Gooch 11:07 They're just more fast and nimble oftentimes. And so if, particularly, let's say we're in a tumultuous economic climate, they can act quickly, adapt quickly, be resilient. And so I think this pays a lot of dividends in a way. So I think there's a lot of benefits coming out of the family business arena that's spurring this growth.

R. Adam Smith 11:37 From my perspective, given that I focus very heavily on the M&A and the transactional side of both buying and selling family businesses or founder-owned companies, this long-term thinking is also really relevant in the, let's say, the corporatization and the scaling of the bigger family office holding companies. I think that's been going on obviously in Europe, and you have the perspective from Europe. There are some really big family businesses in Europe.

I think the US is catching up. Just maybe talk a little bit more about Asia briefly, because I think Asia's faster, and Singapore in particular is quite massive. R. Adam Smith 12:08 Now, just what is the difference with the long-term thinking and the cultural dynamics in Asia?

And then we'll jump into the next topic. Rebecca Gooch 12:19 Well, a lot of the wealth holders in Asia tend to be first or second generation, particularly in China, and they're heavily focused on succession planning right now, which is a really key topic. But for them, the businesses tend to oftentimes not be as old in terms of their multi-generational thinking. Like in Europe, I've talked to a lot of family businesses, they might be fifth generation, sixth generation, seventh generation.

But in Asia they tend to be a little bit more new on the money plane. And so I think that impacts them in terms of their governance structures, in terms of their resiliency structures, in terms of having a lot of factors that are in play. The longer you're around in the business, oftentimes the more sophisticated your structures are, and they know how to deal with different things. For instance, of the family business study I just did, I interviewed 30 family business executives.

Rebecca Gooch 13:03 Of that, 10 were with family businesses that were over 100 years old. And one, said, you had a family business that was about 125 years. And I said, are you worried about the tariffs impacting the world today? And he said, Rebecca, I am not worried about it one bit.

He said, our family business is about 125 years old. Rebecca Gooch 13:21 We have lived through war, we have lived through famine, we have lived through absolutely everything. We have redundancy and resiliency structures put in place for every eventuality. So do the tariffs worry me?

Absolutely not, because we are going to move past them, and have procedures in place to deal with no matter what happens. Rebecca Gooch 13:39 And so I think a lot of these multi-generational family businesses are structured in ways that they can flow with the changing tides and still come out on top. And I think that's still growing in Asia and becoming more sophisticated, which is lending to why the family business arena is growing so rapidly there. R.

Adam Smith 14:04 That's good. Also just the Asian culture of longer-term thinking and also less public market focus as well, right? Rebecca Gooch 14:04 Yes, yes, no, indeed. R.

Adam Smith 14:05 So on succession planning, and thinking about the large generational transfer which is happening, although there is some debate on those numbers, but it's obviously large, NextGen is an increasingly important topic. You cover it very well. NextGen also is a confusing and important term. So just maybe talk about this intergenerational wealth transition that's happening now, and how it affects the governance and leadership of the larger family enterprises, and then how that impacts really the human capital quotient of the family business, both internally and externally in terms of human capital.

Rebecca Gooch 14:44 So we are in a major generational transition right now. I remember back in 2017 surveying family offices, for instance, and I asked them, when do you expect the next family generational transition to occur? And about seven in 10 said within the next 15 years. And sometimes you hear something, but I remember almost needing to sit back into my chair and really think about what this meant, because the magnitude was so significant.

Rebecca Gooch 15:08 Essentially, what they were saying is they were expecting trillions of dollars to change hands over the coming short period of time. So I've been tracking succession planning ever since. And at the moment, we're dead in the middle of this transition. So we expect, within the next 10 years, for instance, another 41% of families will undergo succession.

Now, if you ask about how this is impacting them, we have a challenge that's being thrown up, because what is occurring is a number of families do not even have their succession plans in place. Rebecca Gooch 15:40 In fact, 41% of families admit, when we surveyed them, said we do not have a succession plan in place. Despite this, amongst those that did have plans in place, a large proportion said, in fact, our plans need updating, or they could be better. So there are certain periods of families' lives that they are most at risk of losing their wealth, and generational transitions are absolutely gold star, one of those biggest risk periods.

So it's critical that these families get their succession plans in place. Rebecca Gooch 16:12 That lends to what's going on with their governance structure. That lends to how they're looking at the next generation, they can't see succession as a simple point in time that they need to prepare for. They need to look at next generation training over a very long period.

The most forward-thinking families have both long-term succession plans and short-term contingency plans, and they start with the next gen from a young age, literally kitchen table discussions through to more sophisticated teachings throughout their life. Rebecca Gooch 16:44 But it's got to be something that's indoctrinated throughout a period of time, and that's going to have a lot of implications for the future. As this next gen comes into the fold, they look at the world differently, they invest differently, they approach governance differently, they approach sustainability differently.

They have their own DNA, and they want to have their own fingerprint on the world, and they have the right to do so. But it's an incredibly important transition to watch out for. R. Adam Smith 17:10 I've seen some stats recently.

There's been some recalculations or consideration of the speed of the transition. We have some data from Campden, from you guys, Ron Diamond talks about it and other friends of mine. We see data from JP Morgan all over the place. But I think one thing that is also relevant is that the current lead generation, the G1, or let's say the non-millennial, let's say, our generation that's running the businesses and holds the wealth, they are living a bit longer, they're having more lifestyle considerations longer, and they also are concerned about their children's capabilities, which then leads into, let's say, the challenges and hassle of external recruiting.

R. Adam Smith 17:53 So I think the transition is massive, but these are considerations to consider, in my perspective, because it does really create a catalyst for M&A that sometimes, like, the succession is not desired or too much work or not able to be implemented internally. So that can drive more sale of the asset and just kind of move on, or combinations or platform, merging with other families. Like, we don't have the leadership, our children are uninterested, we don't have children, so let's just monetize this and/or build the asset.

You want to talk about that for a bit? Rebecca Gooch 18:25 That picks up on a key trend we found within the family business research that's just come out, is because we're in this major generational transition, and current family business CEOs, their average age is in their 60s. The current family office CEOs' average age is 68. So they're now thinking about what are we going to do for retirement.

Rebecca Gooch 18:45 Can we give this business or this office to our next gen? And for a lot of them, they can, they can pass it on to their children, and that's great. But for a number of people, the next gen might not have the skill set to be able to do it. They might not have the interest to be able to do it.

And so what's happening is that it's creating a real shakeup, particularly within the family business arena we're seeing right now. So over a quarter of family businesses, for instance, right now are looking at outside investment, private equity, to kind of sell off aspects of their business. Rebecca Gooch 19:16 About 1 in 10 are looking at going IPO. About 3 to 5% are looking at selling their business altogether.

A notable proportion are also looking at selling their business to the people, the backbone people who created the business, which is the non-family members. A number of the executives I interviewed said, do you know what, we don't have a next gen to take over, but we love this business. Rebecca Gooch 19:39 This business has been in our family for generations, and we really want it to go to the people that helped create it, even if it means we take in a little bit less money from the sale.

We want it to go to the executives that built this business. But it is creating a real shakeup within the family business arena right now. R. Adam Smith 20:06 Yeah, that's very interesting to me, and I think the complexity and the preparation needed for a sale of a business is significant, much, much more than a capital raise.

The stats you mentioned, is that something you guys ran recently, the last year, or is that one of those legacy stats? Rebecca Gooch 20:17 No, it's recent. R. Adam Smith 20:17 Yeah, no, it's recent.

Rebecca Gooch 20:17 I can send it to you. It really was one of the key findings, so it's come out this year. R. Adam Smith 20:24 Just briefly, this is a good time to tell our listeners and everyone how to reach you, and just talk a bit about your publications.

Rebecca Gooch 20:44 So we launched a five-part Family Office Insight series, and that touched on everything from the top 10 family office trends to the evolution of the family office landscape. We focused on cybersecurity, digital transformation. Rebecca Gooch 20:44 It's not only about the stats as well. We did numerous interviews with incredible family offices from around the world, for instance, some of the biggest names in the entire arena.

So that five-part series has come out. We're now in the field again. Rebecca Gooch 20:58 We have a new survey for an additional family office study that we're undertaking right now. We are alternating it every other year, so last year it was family offices.

This year we're launching our Family Business Insight series. And so we've already launched a report that looks at the evolution of the family business landscape and a lot of characteristics within it. Rebecca Gooch 21:18 A report that looked at family business cybersecurity, one that looked at digital transformation, and we're about to come out with a new one that looks at succession planning in the next generation. The final one will be called The Fireside, which is a roundup of the top interviews of the year with leading family business executives that, as I mentioned, has interviews with, it's just amazing, 10 of the family businesses were over 100 years old.

Rebecca Gooch 21:41 Imagine the gold dust of nuggets of information they have about succession planning, governance, risk management. It's incredible. And half of the family businesses, I spoke directly with the family principal, so they had a tremendous amount of knowledge to impart. So these series have absolutely a gold dust in terms of sharing information across the arena.

R. Adam Smith 22:03 Thank you for that, Rebecca. Let's move over to technology. There are different ways to approach technology integrations and value add within the big operational companies of family offices.

Just talk about what those tools are and what are the emerging trends, and how important is technology for the family enterprises to thrive. Rebecca Gooch 22:29 Family offices historically have been really fantastic when it comes to investing in emerging technology. It could be AI, green tech, medtech, healthcare tech, amazing at investing in it. Rebecca Gooch 22:29 But when it comes to actually embedding emerging technology into the operations, they tend to be more slow behind the curve, particularly relative to larger institutional players.

And I feel like this is the door I've been knocking on for quite a while to try to raise attention to it, but just recently that door has really opened. So at the moment there is an absolute new, notable shift within the family office arena, that they're saying, hold on, we actually need to soup up our operational platforms internally. So 43% of family offices at the moment are developing or rolling out new technology strategies. And I think a lot of this is being spurred particularly by so much momentum within AI.

Rebecca Gooch 23:13 So many family offices that I've talked to are focused on AI right now. It's going up to the board level. They're focused on AI right now, but when we surveyed them last time, just 12% of family offices had actually adopted AI in their operations. In our new survey that's out, I'm absolutely confident that number is going to go up significantly.

Rebecca Gooch 23:32 Now, family businesses are also really focused on adopting new technology at the moment. So 48% are currently developing or rolling out new technology strategies as we speak. Now this really comes as both family offices and family businesses get that they just do not currently have the operational technology they need to run successful businesses now into the future, and they see it as a core risk to them. So it's why they're souped up in this area.

Rebecca Gooch 24:01 But one thing that's stood out as an interesting finding as well within the family business landscape is, at the moment, 86% of family businesses have adopted AI in their operations. It helps them improve their efficiency, it helps them mitigate risk, improve the customer experience, it helps them scale up, and so on and so forth. So that is an incredibly hot topic at the moment. R.

Adam Smith 24:24 These stats are very helpful to put it into perspective. Thank you for that. Let's move into cybersecurity as one of the last topics, obviously. No right answer, it's important to consider it.

It's been around, but now it's just ever present and very concerning, particularly concerning given the power of AI by the bad guys. R. Adam Smith 24:40 So just what is going on in cybersecurity? And also talk about some of the tools that family offices can utilize, and what Deloitte is doing in that regard to be a counsel to them.

Rebecca Gooch 24:55 So I want to paint a picture on this right now, because I think cybercrime is such a crucial topic right now, but I don't think enough family offices and family businesses have really woken up to their vulnerability here. So I remember surveying family offices back in 2017, and I asked them, how many of you have experienced a cyber attack? And at the time, 15% said they had within the previous year. Rebecca Gooch 25:15 And I thought at the time 15% seemed pretty high, but little did I know it was just going to go up and up and up, because I've been tracking it ever since.

So at the moment now, 43% of family offices said they've experienced a cyber attack within the last year. So 15% to 43% within a relatively short period of time is a notable jump. Now, amongst all of those that have been attacked, 30% said they have suffered some form of loss or damage. So operational damage, financial loss, reputational harm.

Rebecca Gooch 25:46 But there's a huge risk, there's a huge problem here. And as one principal who owned a cybersecurity company told me, he said, I don't think families and family offices realize just how much they're deemed to be low-hanging fruit to cybercriminals, because they do not have the infrastructure to safeguard themselves the way the institutional players do. R. Adam Smith 26:18 So just to pause there, you said 40% plus have had some incident.

First of all, what typically happens, what does that mean, and how is it rectified? Rebecca Gooch 26:18 So oftentimes it might be a phishing attack, right, or a malware attempt, or insider threats, or third-party risks. Cyber crime can come in many forms. Oftentimes they're linked, so for instance, you might have a phishing email, you click on it, and it installs malware on your system.

Rebecca Gooch 26:36 So there are a variety of ways, but the most common tend to be around phishing, in terms of the types of attacks. But there is a really big problem here, because at the moment, about a third of family offices, for instance, say that they do not even have a cybersecurity strategy in place. Way too many of them are expecting their banks or vendors to catch the problems, not them. They think, oh, we're under the radar, aren't we, the cybercriminals won't find them.

Rebecca Gooch 27:03 And that's just not the case. And in the family business arena, family businesses are structured differently, right? So family offices tend to be notoriously private, whereas family businesses, obviously, they want to sell their products and services, so their name tends to be out there a lot more, so they're getting attacked far more readily. So at the moment, seven in 10 family businesses said they've experienced an attack.

Rebecca Gooch 27:23 And what is so alarming about this, and I really want to hit home on this finding because it shows the vulnerability of us right now, so of all of the family businesses that have been attacked, merely 4% said they haven't suffered harm. They haven't suffered financial loss, reputational damage, or operational damage. That means 96% have. Rebecca Gooch 27:43 So that really is a wake-up call to us in terms of what we need to do, because the nature of cyber attacks are becoming so incredibly sophisticated, with AI, with deep fakes, it can be very, very difficult to really detect when an attack is hitting.

And it's no longer about, are we going to get hit, it's of course we're going to get hit. Rebecca Gooch 28:05 It's how many times are we going to get hit, and how can we simply mitigate that damage? So Deloitte Private does a lot of work with the family businesses and family offices that focus on safeguarding themselves and helping them get ready, because, for instance, one of the most important things that you do is you make sure that you have an incident response plan. So if you get attacked, you know exactly what to do afterwards, because that will determine how much damage occurs.

Rebecca Gooch 28:32 You also want things like cybersecurity insurance, that's very important. You want to have your systems tested by third parties, you want them to come in and basically run fake attacks on you, so you can really see under more real-life circumstances, how safe are we really. Rebecca Gooch 28:49 What do we actually need to do in real practice? So there's a lot that my colleagues do to really help this arena prepare themselves, because the attacks, they're growing, and they're growing in sophistication, growing in number.

R. Adam Smith 29:03 Thank you. Yeah, Deloitte's a leader in that, that's great. And people can find you or your team on LinkedIn, is a good place to reach you these days, is that right?

Rebecca Gooch 29:10 Absolutely, yeah. R. Adam Smith 29:13 And your reports, are they available on your website, generally speaking, or some sort of a sign-up? Rebecca Gooch 29:13 Yes, definitely, 100%, they're on the Deloitte website, and there is a page where you can sign up for them so you can receive all future reports.

Happy to send to you, because we have a great pipeline of data that's coming out. R. Adam Smith 29:31 Great, yeah. The industry, of course, is much more giving in such reports than the old days.

We'd have to go behind the paywalls, but now the industry is out there sharing them, which is helpful to everybody. Rebecca Gooch 29:31 We just want that information out to everybody, I think. R. Adam Smith 29:53 Just another last comment on cyber, is also the importance of digital storage of information.

Beyond a OneDrive or Google Drive or Dropbox, we see some pretty significant movements in encrypted data storage in the industry from Trusted Family, FanVault, Addepar, and others. I think it's really important, and it's exciting to see that industry build in terms of professional encrypted data storage. Can you just talk a bit about that, and encourage the larger family offices, given the sensitivity and the fragmentation of that data, to really think about proper storage? Rebecca Gooch 30:51 Well, I think storage is absolutely critical, and I think, for instance, have your 3-2-1 process in place in terms of data backups.

So having your data backed up twice within your office, have your data backed up externally, having information in the cloud, making sure that you can reach it, make sure you're safe, making sure that you look at the different vendors you use. Rebecca Gooch 30:52 For instance, if they hold your data, how secure are they? So make sure you really do thorough checks on your vendors and how they hold your information to ensure it's safe. So there's a variety of things that you can do.

There's one thing I would suggest, it was in our last Family Office report that looked at cybersecurity, we have a checklist at the end that are more general mechanisms that you can use, safeguards you can put in place, and then more sophisticated ones. Rebecca Gooch 31:19 And it's an incredibly useful checklist, because you can literally go through with your cybersecurity team, what are we doing, what are we not doing, and it'll help you kind of determine a pathway forward for how you can safeguard yourself a bit better.

So that's a wonderful report to turn to. R. Adam Smith 31:36 Great, thank you so much. We've covered a lot today.

Let's just wrap up with, let's say, talk about your role and what is one of your favorite elements of what you do on a day-to-day basis? Rebecca Gooch 32:01 So Deloitte Private consists of our work on family offices, family businesses, wealth holders, and also the private equity landscape. And so my research tends to focus on the family office and the family business arena, and it's just a real passion area. Rebecca Gooch 32:01 I've been focusing on family offices for a number of years in particular, and it's just, you see the tremendous growth and rising sophistication in it.

And so I think one of my favorite things that I do is getting to speak with these incredible families, both that cover family offices and family businesses, and the executives, because the talent pool out there is spectacular, and the stories these families have to tell is amazing. So I feel very, very lucky every day for the type of work that I do, because it's just incredible to see these spheres mature so quickly, and to be able to harness that information and share it with others.

R. Adam Smith 32:44 Very fortunate. Thank you. I'd like to thank you for your time and insights today, and of course our attendees today and in the future.

Again, thank you to Dr. Rebecca Gooch of Deloitte Private. It's really great to have you here today. Rebecca Gooch 32:57 Well, thank you so much.

I really appreciate you sitting down. R. Adam Smith 32:57 Yeah, I'm glad we finally got it done. I wanted to recap, what stands out for me today is the scale of the family enterprises that are just increasingly large and building and sophisticated and institutionalizing.

And with that comes, as we've discussed, the impact on their community, on their country, on their employees, on the technology risk, and just wealth creation in general. And of course it also creates some longer-term thinking dynamics for stewardship and governance and preparation for their scale. R. Adam Smith 33:33 And as you said, sometimes it involves the next gen and sometimes it doesn't.

But I think the families that are most likely to thrive are those that really have that dynamic institutional governance, but also think longer term, being flexible and having a very creative and proactive view of their wealth, including building some very large operating companies, which is exciting to see. So that's all for now. This is R. Adam Smith signing off.

Please stay tuned for the next episode of the Family Business Audiocast.