Inheritance Risk Management Towards the Sustainability of Global Family Businesses in Malaysia

Abstract

This study investigates the impact of Family Governance and Inheritance Risk Management on the Sustainability of Family Businesses in Malaysia. Drawing on Socioemotional Wealth and Stewardship Theory, the research examines how governance structures and inheritance planning contribute to the long-term viability of family-owned enterprises. A quantitative, cross-sectional design was adopted, using survey data collected from 186 Malaysian family firms across manufacturing, services, and trade sectors. Data were analyzed using SPSS 29 and Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 4. The results reveal that both Family Governance and Inheritance Risk Management have significant positive effects on Family Business Sustainability (β = 0.461 and β = 0.435, p < 0.001), jointly explaining 91.1% of the variance in sustainability outcomes. These findings confirm that formal governance mechanisms enhance transparency, reduce risk, and align generational goals, while structured inheritance management strengthens continuity and intergenerational harmony. The study extends existing literature by integrating governance and inheritance as interdependent drivers of sustainability and by providing empirical evidence from an emerging economy perspective. The implications highlight the need for professionalized governance, proactive succession planning, and culturally attuned inheritance frameworks to ensure the resilience of Malaysian family businesses.