Boards of directors have important responsibilities in the context of top management succession processes. However, their role has not been sufficiently studied in the setting of family-controlled firms. Meanwhile, family executives often play a major role in the performance of family firms. In fact, replacing those family managers has important implications and needs to be treated as a priority by boards of directors. In this industry note, we explore the unique challenges that succession processes pose for the boards of family firms. We conclude that boards of directors should be particularly conscious of the need for planning, coordinating, and overseeing succession processes to meet both the business challenges and the controlling family's expectations.

Many factors influence corporate governance in a family firm, the most prevalent form of business entity in Latin America. National culture affects a family firm's societal values, as well as economic, political, and legal systems of governance. Normative behaviour and expectations are also key factors that affect both individual and organizational norms. The firm's characteristics are another major source of influence. In addition to these major factors, various other variables play a role on shaping the firm's corporate governance, including family unity, patriarchal expectations, and inclusivity of the family definition. All of these factors can influence the numerous decisions that family businesses make in regard to their corporate governance, which makes it impossible to apply one approach for all family firms in Latin America. Each organization's board of directors may have specific characteristics that require different mechanisms to make effective governance decisions. This technical note discusses an evolutionary pattern of corporate governance, rather than a single approach, that could be effectively applied to the decision-making board of a family firm in Latin America.

The case documents the strategic options open to Quiñenco, the quoted holding company 82% owned by the Luksic family, in its ambition to become a major multilatina. Their successful strategy has been to acquire under-valued companies, enhance their assets and sell them for a gain. However, the stock price of Quiñenco has languished since the initial IPO in July 1997.

The case describes AOL Latin America, a joint venture with Venezuela's Cisneros Group. It highlights the challenges faced by AOL, a leading brand, into entering emerging markets. AOL was a latecomer in Latin American Internet and had a difficult debut in Brazil after a challenging Initial Public Offering.