franklin templeton CEO Jenny Johnson has two equally challenging jobs. She oversees a fund company that manages nearly $2 trillion in assets within an industry that has experienced an accelerated shift from active ETFs to tokenization. And as the third-generation leader of the Johnson family, she is in charge of the legacy of a business started by her grandfather 79 years ago that is now valued on the stock market at about $13 billion.
It’s remarkable that a family business like Franklin Templeton lasts for three generations. To make this point, Johnson often refers to proverbs that appear in various forms around the world. In America, it is said that “shirt sleeves change every three generations.” In Europe, it’s “geta to geta.” And in Asia, it’s “from rice field to rice field.” There is also a “rich father, noble son, poor grandson.”
In other words, the first generation may build a business, the second generation may grow it, and the third generation may cause it to fail. The actual data supporting this global narrative is debatable. A 2021 Harvard Business Review analysis conducted during the height of HBO’s family business drama “Succession” found that the statistics commonly cited in the “third generation failure” theory are based on a single study from the 1980s, and that the data can be easily misinterpreted. Nevertheless, family businesses have their own risks that need to be dealt with in their own way, and many families are not adequately prepared. According to PwC’s 2023 U.S. Family Business Success Study, only 34% of family businesses have a documented succession plan.
One of the challenges, Johnson says, is that each generation has a different experience with the company. Founders start small and strive to create something of value. Their children see their hard work and want to contribute to the company’s expansion. And in the third generation, the environment is different because the business is already established and the younger generation may also have unique interests. And those interests don’t always coincide with hard work.
“The third generation has a really comfortable life, but it’s hard to get the motivation to work hard because there are so many other things they can do and it doesn’t necessarily change their standard of living. That’s my guess,” she told CNBC’s Julia Boorstin on the latest episode of the podcast “CNBC Change Makers and Power Players.”
Johnson was named to the 2026 CNBC Changemakers list.
Jenny Johnson CEO Franklin Templeton on the New York Stock Exchange in 2022.
Source: New York Stock Exchange
Her perspective was shaped by her father, second-generation Franklin Templeton CEO Charles Johnson, who turned a mutual fund manager into a global investment firm and became a billionaire. But for Jenny, the roadmap for leadership and legacy has been taking shape over the years, and the risks inherent in the family business have always been on her mind. In fact, she said the family hired an estate planning expert as part of her father’s 80th birthday celebrations, and that among the things the professional told the family was that he was “tired of doing all this estate planning and completely ruining his heirs.”
From Johnson’s research and practical experience, she has identified several factors that are critical to sustaining success for generations. First, families need a set of values that are continuously inculcated. Second, businesses must always take care of their customers. Third, the family must determine the best person within the family to be the custodian of a particular asset, without leadership positions given to any member.
Johnson says his father instilled values and a customer-first mantra, and agrees that successful family companies thrive on a culture that is shared and strengthened early on. “If you’re part of this family, you’re going to live by these values and work hard (and) with integrity,” Johnson said.
But growing up the sixth of seven children, she never imagined she would end up running the family business. “I actually didn’t see myself as a CEO. … I didn’t really think about it,” she said.
Ultimately, it comes down to choosing the right family member for the right job.
“We all went to work for this business at some point because we needed jobs. It was convenient. By the time we graduated college, the business was growing very quickly. This was the ’80s. It was the heyday. At that point, people woke up to mutual funds and we had huge growth. … People who had the passion stayed in the business for a really long time,” Johnson said.
Before being named CEO in 2020, she held multiple positions within the company, primarily focusing on technology and operations, which she said she “loved.” And she says having a technology background is critical for market CEOs in the world of AI and tokenization. It was also an approach to learning business that she inherited directly from her father.
“When he took over the company, he had only part-time employees and himself. He did every job: fund treasurer, technology, customer service, investment rep, sales rep. At 93 years old, he’d circle a footnote on something and send me a note and ask me questions about it. He understands on that level.”
Her brother Greg focuses on the investment and distribution side of the business and was CEO before her. Gregg currently manages MLB’s San Francisco Giants. Their father, Charles, was the team’s largest shareholder before handing over control to his son. “I think there are a lot of people who think it’s more fun to run a sports team. Personally, I like what I do better,” she said.
A former Giants board member herself, she now says, “He’s a much better steward of that asset than I am. He’s the right family member to be in charge of that asset.”
“As a family, it’s about being able to put your ego aside and say, ‘Who’s better to represent our family?'” Johnson said. “In reality, you have to decide who in your family is the best person to be the steward of the property.”
“At that point, it made sense for me to come in and become CEO, but it wasn’t a fait accompli,” she said.
The board submitted her to an external review to compare her with other potential CEO candidates.
Ultimately, it was “what I can do to build this business, this family’s legacy. I certainly feel like that’s a part of it,” she said.
Johnson took the helm during the pandemic and quickly rose to prominence as Franklin Templeton made a major acquisition of Legg Mason, doubling the company’s size. Despite the timing, Johnson describes the pandemic period as a reminder of how important consistent leadership is. “You just have to work through it,” she said. “Something will happen again. We’ll manage.”
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