Succession structure in family business

Generational transitions and family values

A customer walking into an opulent Mouawad store in Dubai, Bangkok or the most recent addition to their portfolio, in London, would be forgiven for assuming that the business, now incorporating the fifth generation of the owning family, has always run as smoothly as the limousines lined up outside the stores. But, over the past 15 years, the family has radically restructured the way the business runs, and the roles of the family members within it.

The big moment came in 2010, when Robert Mouawad, from the third generation to run the business, stepped down as chairman and CEO, handing over to his three sons. Robert had grown the business internationally and increased its profile notably among consumers of high-end jewellery.

Robert had been careful to give his sons the best possible training. According to Pascal Mouawad, Robert’s son: “From a young age, during our holidays, we would be taken to our factories and watch how the jewellery was being made, and we would sort diamonds, accompany our father to trade shows, and see him work with his VIP customers. We were trained from a young age to become the next generation.” Pascal went to high school in Switzerland and university in the US, where he also gained a gemology degree and an MBA.

But, as young adults, when Pascal and his brothers Fred and Alain started actually working in the business under their father, they soon came up against an uncomfortable truth: working for their father was different to being shown the family business as children. “We came to understand that our father was very passionate about maintaining control of the business,” says Pascal diplomatically. “With that in mind, we felt it would be valuable to first build our own experiences outside the family business.” They pursued their own ventures in related areas, all with the blessing of their father, and while continuing to have strong business ties with the family company.

Then, the key moment came. In 2009, their father announced that he would hand over the company to his sons, with just four months’ notice, starting in January 2010.

Robert had been a hands-on CEO, controlling every aspect from design through business development. The sudden handover created challenges, says Pascal. Firstly, they had to work out their mutual responsibilities. They decided that Pascal and his brother Fred would become co-CEOs, while Alain would focus on leading the real estate division.

“What had once been guided by a single leader was now shared among two,” says Pascal. “Learning to lead alongside my two brothers brought both opportunities and challenges, especially within Arab culture where leadership traditionally passes to the eldest.”

It was, Pascal admits, “a little bit of a struggle”. There were two CEOs running the business and all decisions had to be agreed by both of them. “We needed alignment on strategy, direction and key appointments. But with just the two of us – equal in voting rights – decisions often became difficult. Our perspectives diverged on many issues, and full alignment was not always possible.” 

They soon decided to restructure. All three brothers would officially be called co-guardians of the brand, and each would be given one division to run. It worked well on paper: Pascal had responsibility for retail and Fred looked after the diamond division, as his area of expertise. Alain, rejoined operationally a little later.

But this new structure brought its own challenges, as running divisions independently was not effective. So the brothers took the decision to restructure the company again, this time successfully, into the shape it holds to this day. Day-to-day management was handed over to an appointed team of professionals; the owners would be board members, approving all strategic decisions.

They have since helped the company reach new heights with the vertical integration of the business, while incorporating some of their own children, members of the fifth generation, into the company.

Embracing a new structure

This new structure has worked very well, says Pascal. The business is run by a single group general manager, supported by appointed executives who oversee the respective divisions.

Meanwhile, the board meets monthly, virtually, with the general manager and the brothers play an important operational role as active brand ambassadors, attending events, trade shows and client meetings: “at this level, major clients want to meet with a family member”. They also retain oversight of all major decisions and participate in key committees – such as design and marketing – while also shaping overall strategy and appointing key executives. They sign off on jewellery design, marketing direction, market entry and new store acquisitions.

The family is now carefully bringing the fifth generation – Anastasia, daughter of Alain, and Jimmy, son of Fred – into the business. Based in London, Anastasia is increasingly involved in client events and Jimmy is more focused on design.

Bridging past and present

Sitting on the advisory board to input their views is also something the fifth generation is involved in. Anastasia Mouawad, speaking about her role, says: “Coming from the digital generation, my role is to bridge the timeless values of craftsmanship, artistry and legacy with the possibilities of the modern world. It is about honouring our heritage while asking, ‘How do we share our story with a new generation, in ways that resonate globally?’” She says she has been impressed by the way her parents’ generation see them as “architects of the future” for the brand, which tallies with Pascal’s assertion that he and his brothers are ensuring they bring the next generation in gradually, so they have a different experience to their parents.

In offering guidance to other family-owned enterprises, Pascal Mouawad draws on the established three-circle framework, which distinguishes between the family, management and shareholder domains. He emphasises the importance of first mapping, where each individual belongs within these circles before implementing governance, management or succession structures.

According to Pascal, the greatest challenge lies in achieving alignment across these spheres – a task that, if overlooked, can lead to conflict and inefficiency. Best practices in family business governance therefore call for clarity of roles, transparent decision-making processes, and structured communication channels to ensure that alignment is not only achieved but sustained over time. When these elements are in place, he says, families are better positioned to preserve harmony, build professional management capacity and secure long-term continuity.