Is the institution of succession management an unnoticed opportunity?

Abstract

The institution of succession management was implemented in the Polish legal framework by the provisions of the Act of 5 July 2018 on the Succession Management of a Natural Person’s Enterprise and other Facilitations connected with Business Succession. This institution allows sole proprietors to ensure business continuity in the event of their death. On average, around 1,000 entrepreneurs monthly are removed from the Central Registration and Information on Business database (CEIDG) due to the death of these entrepreneurs. Although sole proprietorship is the most popular form of conducting business, the utilization of this institution is negligible. The aim of the article is to highlight potential reasons of this state of affairs. Both, quantitative and qualitative research methods were employed. Data from CEDIG, covering over four and a half years since the implementation of the act on succession management, where analysed. The research included data related to the succession manager appointment by entrepreneurs during their lifetime, as well as cases related to the appointment of such a manager by heirs after the entrepreneur’s death. The results indicate that only a small percentage of entrepreneurs appointed a succession manager. The vast majority of succession managers performing their duties were appointed by entrepreneurs’ heirs. Sixteen in-depth interviews were conducted with sole proprietors, with the aim of illustrating their knowledge and attitudes related to the discussed issues. The entrepreneurs indicate that they did not appoint a succession manager due to their lack of knowledge of the institution in question. Any potential change in future behaviour would require an effective information campaign.