The concept of nepotism has been with us since the mid-17th Century, when Italian Catholic popes began giving their nephews, or nipote, high-ranking church positions strictly because of familial ties. Even now, it’s a practice humans can’t seem to shake. 

Recently, cultural pundits have brought laser-sharp focus to the habit of giving offspring unearned access to wealth and power by tracking nepotism’s beneficiaries, the so-called nepo babies. They are usually actors, screenwriters, models, and musicians who were fast-tracked within their careers with the help of a parent in the business. Their talents—or lack thereof—draw extra scrutiny.

But nepo babies are everywhere, including at the helm of large public companies, where they can be judged harshly. Lachlan Murdoch, 52, recently assumed the executive chair and CEO role at Fox Corporation, taking over from his father Rupert. Gus Wenner, 33, became CEO of Rolling Stone in 2022 to run the media brand his father Jann launched. Outside of media, all five of the Arnault siblings, whose father Bernard Arnault is CEO of LVMH, one of the world’s largest luxury goods companies, are nepo execs, holding CEO, directorship, and other leadership jobs at LVMH’s holding companies or brands. Alex Soros, 38, may not be CEO of Open Society Foundations, but his father George gave his chair seat to his son last year.

David Ellison cemented his status as a nepo CEO thanks to a big assist from his dad, the eccentric Silicon Valley billionaire who founded Oracle and remains chair of its board and chief technology officer. The senior Ellison is the world’s seventh richest person, according to Bloomberg, which pegs his net worth at roughly $160 billion. And the tech titan invested $6 billion of his family office funds into his son’s Paramount bid, which included a critical promise to keep the company intact. Larry Ellison’s gesture reportedly gave Skydance an edge over competitors. (Skydance declined to comment.)

How nepo CEOs earn respect

For these executives and others like them, successfully earning respect from their executive teams and employees will come down to walking a tightrope, say experts who spoke to Fortune. Nepo baby leaders need to show a willingness to listen and learn, without appearing inexperienced or uncertain. They also have to take credit for their wins to establish their own credibility, without ignoring the contributions of their team members and alienating top talent. “If you get good business outcomes but it’s perceived that all the people around you are holding up the sky, that’s not great,” says Jane Stevenson, the global leader of board and CEO succession practice at Korn Ferry.

Perhaps most importantly, nepo CEOs need to keep their egos in check, while discarding any sense of entitlement. “Leaders need to be humble and they need to hear feedback that is awfully uncomfortable to hear,” says Moshe Cohen, a senior lecturer of management at Boston University’s Questrom School of Business. “If you’re coming in as the anointed successor, you might not be that open to feedback, and other people might not feel comfortable giving it to you because, well, you’re the kid of the founder.” (Or, in Ellison’s case, the kid of the money.) 

At publicly traded companies, boards and nepo CEOs need to navigate an unusual division of power, Stevenson says. Unless the CEO’s family has a majority of voting shares in a company, he or she must cooperate with and even inspire independent directors, who have the power to replace the leader. 

The upside of a nepo CEO

Fortunately for Paramount employees exhausted by months of deal drama, nepo CEOs like Ellison aren’t always bad news. In fact, they can be brilliant and effective, says Stevenson. Among living examples are Abigail Johnson, CEO of Fidelity Investments, and Mark Smucker, the 5th generation heir and CEO of the Smucker jelly company. Since A.G. Sulzberger took over as publisher of the New York Times from his father, he has overseen an era of significant growth.

The best nepo CEOs arrive poised to succeed because they’ve been an informal student of business their entire lives. “If you’ve been hanging on the elbow of a parent who was a CEO or founder, you’ve learned some things that people who aren’t in the thick of it don’t see,” says Cohen. Depending on their relationship with their parents, a nepo CEO may have absorbed nuanced lessons about negotiations, relationships, or articulating a company’s vision, he adds. “Those are things that people work really hard to learn.”

But there’s always a danger that even the most conscientious offspring of business icons have limited range, Cohen adds. They know how to be a CEO like their parents—and that’s it. Among today’s nepo CEOs, few have spent time outside of the family business. David Ellison, who started Skydance 18 years ago, is an exception, straying from his father’s tech-centered universe. His firm has funded several films, including Top Gun: Maverick, but also less successful flicks. Lachlan Murdoch briefly left the family business to run his own media investing company, then returned to his father’s empire.

Families in the business of promoting a promising heir would be wise to take a page from the Smucker family rule book and send future leaders out into the world to find internships and jobs elsewhere to broaden their experiences. “Because otherwise, you only have one way of doing things,” says Cohen, “and the world keeps changing.”