Family-Owned, but Not Family-Run: U.S. Family Enterprises Expect Sizable Shift Away from Internal Leadership Over Next Decade, KPMG Finds
93% of family businesses are confident in their growth strategy but face a critical "Architecture Gap" around AI governance and external talent
NEW YORK, August 27, 2026 – U.S. Family enterprises are entering a period of profound structural transition. While confidence in the generational wealth transfer – and family legacy and future vision – is at an all-time high, family owners are actively preparing to hand over day-to-day operations to outside executives, according to the 2026 US Family Business Report from KPMG LLP, the U.S. audit, tax, and advisory firm.
The survey reveals a stark evolution in how private wealth views leadership. While an overwhelming 91% of respondents expressed strong confidence in the next generation's ability to lead as owners and board members, only 36% expect family members to occupy most senior leadership roles over the next decade.
“The data challenges a traditional operating assumption that succession simply means passing every leadership role to the next generation," said Tracey Spivey, National Practice Leader for Family Enterprise, Tax at KPMG LLP. "We are seeing a strategic shift from ‘family run’ to ‘family governed.’ Families are realizing that separating ownership from daily management means that the best person to grow the business, while keeping the values, reputation and long-term perspective that made it successful in the first place, may come from outside the family."
The “Architecture Gap”; Ambition is Outpacing Infrastructure
As family enterprises become more comfortable separating ownership from management, they are also confronting the governance, talent and technology requirements needed to support their next phase of growth. The findings reveal a clear "Architecture Gap" between growth ambitions and the organizational capabilities required to deliver on them. Respondents cited attracting high-quality external talent as their top workforce challenge (39%), while 51% identified AI strategy and deployment as their largest organizational skills gap.
Technology provides perhaps a clearer illustration of this “Architecture Gap”. While 86% of respondents are either piloting or scaling AI initiatives, only 40% have established a formal AI governance framework to oversee those efforts. The disconnect extends beyond technology: a lack of formal governance can make it harder to attract the outside executives and specialized AI talent that many family businesses will increasingly depend on for growth. As leadership transitions from family-run to family-governed models, governance itself is becoming a competitive advantage, helping family enterprises attract the talent needed to scale while preserving the values that define family ownership.
The survey highlights other key themes shaping the institutionalization of the family enterprise:
Professionalizing Leadership & Talent
- Only 36% expect family members to occupy most senior leadership roles over the next decade.
- Attracting high-quality external talent is ranked as the absolute top workforce challenge.
- 73% are putting younger generations through on-the-job training, focusing on board-level governance rather than pure operations.
The AI & Governance Paradox
- 86% are currently piloting AI or have adopted it at scale.
- 51% cite AI strategy and deployment as their most severe organizational skills gap.
- Only 40% have established a formal AI governance framework.
Growth & Strategic Vision
- 93% agree they have a clear, documented growth strategy for the next five to ten years.
- Shared purpose and family reputation are cited as the primary value drivers of the business, ranking ahead of pure financial capital.
The findings suggest that the most resilient family businesses over the next decade will be those that successfully institutionalize their governance, upgrade their technology oversight, and integrate outside leadership, all without losing the advantage of long-term family ownership.
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Q&A
| Question | Answer |
| What is one of the biggest changes facing U.S. family enterprises over the next decade? | U.S. family enterprises expect a significant shift from being “family run” to “family governed.” Although family members will retain ownership and board-level influence, many businesses are preparing to place day-to-day management in the hands of external executives. |
| How many family businesses expect family members to hold most senior leadership roles? | Only 36% expect family members to occupy most senior leadership roles over the next decade, signaling a sizable move toward professional, non-family management. |
| Are family businesses confident in the next generation? | Yes. 91% of respondents expressed strong confidence in the next generation’s ability to lead as owners and board members. The findings indicate that this confidence does not necessarily extend to having family members manage daily operations. |
| What does the shift from “family run” to “family governed” mean? | It means separating ownership and governance from daily management. Family members can continue to protect the business’s values, reputation and long-term perspective while selecting the most qualified leaders, including external executives, to operate and grow the organization. |
| What is the “Architecture Gap” facing family enterprises? | The “Architecture Gap” is the disconnect between family enterprises’ growth ambitions and the governance, talent and technology capabilities required to achieve them. The report finds that many businesses are pursuing growth and AI adoption without yet having all the necessary organizational infrastructure in place. |
| What is the top workforce challenge for family businesses? | Attracting high-quality external talent is the leading workforce challenge, cited by 39% of respondents. This challenge is increasingly important as family enterprises look outside the family for executive leadership and specialized capabilities. |
| How are family enterprises preparing younger generations to lead? | 73% are providing younger family members with on-the-job training. That development is increasingly focused on ownership and board-level governance rather than preparing the next generation solely for operational management roles. |
| How widely are family businesses adopting artificial intelligence? | 86% of respondents are either piloting AI initiatives or have adopted AI at scale, indicating that AI activity is already widespread across family enterprises. |
| What is the biggest AI-related capability gap? | 51% of respondents identify AI strategy and deployment as their most significant organizational skills gap. This suggests that adoption is moving faster than many organizations’ ability to manage and deploy AI strategically. |
| Do family businesses have formal AI governance in place? | Many do not. While 86% are piloting or scaling AI, only 40% have established a formal AI governance framework, creating a notable gap between AI activity and oversight. |
| Why is governance becoming a competitive advantage for family enterprises? | Strong governance can help family enterprises manage technology responsibly, attract outside executives and specialized AI talent, and scale the business while preserving the values associated with family ownership. |
| How confident are family enterprises in their growth plans? | 93% agree that they have a clear, documented growth strategy for the next five to ten years, demonstrating strong confidence in their long-term direction. |
| What do family businesses consider their most important sources of value? | Respondents rank shared purpose and family reputation as the primary drivers of business value, ahead of financial capital. |
| What will distinguish the most resilient family businesses in the coming decade? | The findings suggest that the most resilient organizations will institutionalize governance, strengthen technology oversight and integrate outside leadership without losing the long-term perspective and values that come with family ownership. |
| How was the research conducted? | The findings are based on 109 U.S. responses to the 2026 KPMG Global Family Business report. The research was conducted by Meridian West, an independent research firm, during the first quarter of 2026. |
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