Why Italian Family Firms Need Governance Before They Need a Buyer

Italy is heading toward an unprecedented transfer of wealth. A joint study by Pictet Wealth Management and the Politecnico di Milano estimates that Italian family businesses will generate 3,908 liquidity events between 2026 and 2035, worth a total of €346 billion, according to Forbes Italia. 

That is a sharp increase from the 2,639 deals recorded in the previous decade, Milano Finanza reports. The financial press is covering this wave heavily, but the attention is almost entirely on the buyers, the funds, and the prices.

Yet as Il Sole 24 Ore notes, a sale to a fund is often the last card played by family businesses when that delicate process, the generational handover, has failed. Almost nobody talks about the preparation that has to happen before the deal.

The typical Italian entrepreneur is over 65. There is often no succession plan. The company is deeply fused with the founder. The family roles are blurred. Ownership and management are not separated. Decisions get made without a real process. In this environment, a company that depends entirely on its founder is very hard to sell.

Sebastiano Di Diego sits at the family table before any transaction happens. He is a corporate finance lecturer, a CPA (commercialista), and an advisor who works only with family businesses. He argues that the real obstacle is not finance. It is governance.

Di Diego says, “The entrepreneur has a big problem. It isn’t in the business but is in the governance. They are not able to manage the relationship with their family, and they won’t accept help to manage this problem. Too many people talk, and the company doesn’t have the right focus.”

This governance failure creates a readiness problem. When an owner wants to sell, they often come to the table with confusion. They do not know if they want to sell, continue with the family, or find a partner. Di Diego’s approach is to start by clarifying the family situation first. Only then can they decide what is best: go alone, bring in a partner, or sell.

The preparation stage is critical. Di Diego argues that no one wants to buy a company that depends entirely on the entrepreneur. He provides a specific framework for what an owner should have in place before a sale:

First, the business must be able to produce clean numbers. They need to understand what EBITDA is and what their true financial position is, rather than overvaluing the company based on properties.

Second, the company needs a governance structure with a board of directors that actually functions. It cannot just be a formal board that exists on paper.

Third, the family must reduce the internal complexity. As Di Diego says, “There is a lot of confusion. Every member talks, but it isn’t clear if they have the title to talk.” If the family cannot resolve this, the goal becomes finding a new home for the company within a larger group. This allows the family to monetise the business while members take on management roles in the new structure.

Di Diego often works with families for three or four years. He might start by working with the founder’s son or daughter to see if they have the skills to become a true entrepreneur. In small Italian firms, family members often work in operations. They are good employees, but they lack the strategic vision an entrepreneur needs.

The problem is that many owners wait until there is no alternative before they act. By then, they only have one option: to sell. And when you only have one option, you cannot maximise the value.

He says, “When you don’t have an alternative, you can only sell. And the problem is you cannot maximise the value because there isn’t another alternative. But if you understand what is important for you, you can have many alternatives.”

Looking ahead, Di Diego hopes Italian family businesses will change how they make decisions. He argues that the quality of a decision depends on three things: the people involved, the process, and the information. In too many family firms, the entrepreneur is the only one who decides. That works for a time, but it is impossible for one person to know everything in a complex market.

The future requires a strategic process. It requires bringing people with different skills to the table where the big decisions are made, not just in operations. The entrepreneur must manage the company in equilibrium: governance, strategy, people, and value. They must work to increase the value of the company year by year, not just wait until they are forced to sell.

Preparation creates choices. Choices create value. For Italy’s family businesses, the deals are coming whether they are ready or not. The question is whether they will control the outcome or let the outcome control them.