A Pan-African initiative by Mary Oppenheimer Daughters

A safe place to talk

Why the time may be ripe for a
pan‑African family business forum
Philip Rubenstein

FAMILY
FORUM building ties, deepening knowledge, driving success
 ‘A safe place to talk’ was commissioned by Mary Oppenheimer Daughters family office
(MODO). Supported by prior research and a series of interviews conducted in 2018,
this confidential study helped to inspire the establishment of The Family Forum in 2019.
A brief description of this pan-African initiative follows at the end of this publication.

The Family Forum is headed by Terence McNamee.

For more information, email familyforum@modaughters.com
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A safe place to talk

Why the time may be ripe for a pan‑African family business forum

Contents
Key points 4
There’s no business like family business 5
Pride of Africa  9
Tests of longevity 11
It pays to share 12
An idea whose time has come? 16
Suggested further reading and resources 19

About the author

Philip Rubenstein is an independent marketing consultant and business writer.
Based in the UK, his clients span a variety of businesses and sectors.

Published in June 2019 by

Mary Oppenheimer Daughters Proprietary Limited
3rd floor, 13 Baker Street, Rosebank, Johannesburg 2196 South Africa
+27 (0) 10 035 4500
All rights reserved. The material in this publication may not be reproduced, stored, or transmitted without the
prior permission of the publisher.
Layout and design by Sheaf Publishing, Benoni
For information on The Family Forum, email familyforum@modaughters.com

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Key points
00 Family businesses – the backbone of Africa’s economy – account for
70 to 80 per cent of GDP of the world’s market economies, and are
major contributors to employment, wealth creation and tax revenues.

00 Family-owned firms can be small or large: in Africa, up to 140 of them

are US$500m+ concerns.

00 Africa’s family business leaders are, on the whole, optimistic about

the future: they see opportunity ahead as the continent is forecast to
enjoy economic growth and increased stability.

00 For all their advantages, however, family businesses are vulnerable to

some serious challenges; these include sibling rivalry, family feuds,
nepotism, resistance to change, and succession struggles.

00 Any one of these problems has the potential to damage, or in extreme

cases, even destroy the business; it is notable that fewer than
30 per cent of family businesses survive to the third generation.

00 First-generation African businesses are especially vulnerable over the

issue of succession: the survival rate of African family firms beyond
the founder’s generation is low, and evidence suggests that only
a minority of today’s founders are engaged in formal succession
planning.

00 The family business forum is a well-established model throughout

the world to help business families address and overcome these
challenges. It provides a safe and confidential ‘club’ for business
families to gain knowledge about what makes a family firm succeed
and endure over the generations, and to share their experiences of
running with their peers in other family businesses.

00 From a series of interviews recently conducted by the family office of

Mary Oppenheimer Daughters (MODO) and a leading business school,
it is evident that there is appetite among the leaders of prominent
family-owned businesses across the continent for an invitation-
only, pan-African forum to bring them together to share and learn.

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A safe place to talk

Why the time may be ripe for a pan‑African family business forum

Family-owned businesses can be the best or the worst of companies. At their best, their unique
strengths of committed ownership, strong values and long-term vision combine to produce
businesses that endure and flourish across the generations. But for all their pluses, they have
the potential for role conflicts, rivalries among colleagues who are also family, and succession
struggles – all of which make family enterprises challenging to lead and govern.

Family business forums have become increasingly popular throughout the world, as multiple
generations of owners have come to appreciate the value of a safe place to meet their peers
and discuss, in confidence, everything from succession and family harmony to responsible
ownership and business opportunity.

With Africa on the rise, and with many family-owned firms across the continent engaged
in transitioning from founder to the next generation, might there now be an appetite for
a grouping of Africa’s larger family businesses to meet, share and learn from each other?

There’s no business like family business

The prevalence and success of family-owned firms across the globe has arguably been one of
the best kept business secrets of all time.

Family businesses, the world has learned in recent years, are the most
pervasive form of business throughout history. It is estimated that A family business
family-owned firms today represent 70–80 per cent of GDP of all the
world’s free market economies. is simply one that’s
A common prejudice still persists that family businesses are small. influenced by a family or
Certainly, the majority are: small family companies in Holland,
for example, represent 75 per cent of all companies in the country; a family relationship –
and small family firms in the United States generate 60 per cent of all
employment. and that thinks of itself
It may come as a surprise to some, therefore, to discover that as a family business
30 per cent of the largest companies in the world are family-owned or
-controlled: think Arcelor Mittal, IKEA, Maersk, Suntory, Volkswagen
and Wal-Mart, to name but a few. In Germany and France, for instance, a majority of the
250 largest listed companies are family dominated; in the United States, one-third of the
biggest 500 companies are family-owned; and in India, 16 families control two-thirds of all
private sector assets.

So what exactly is a family business? Wordy articles have been published and academic careers
built on this topic, but a consensus has yet to be reached. In the most straightforward cases,
a family business is one which controls more than 50 per cent of the share ownership or when
family members fill a significant number of the senior management positions. But definitions
such as these can be too narrow and simplistic: for example, what about the family that still

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Family business
a global snapshot

Economic contributors
Family business accounts for
70–80% of GDP
of the world’s free market economies

Major employers
Family businesses in India, for example, employ almost
80% of the private sector
Larger than people think
30% of the world’s largest
corporations
are family‑owned or ‑controlled

Superior performers
Top publicly‑listed family businesses have outperformed
the global equity market by an average

5 per cent each year

since 2006
(Credit Suisse)

has effective voting control over its publicly-traded business, even though it owns less than
50 per cent? Peter Leach, a family business adviser of over 30 years’ standing, works with a
more practical definition: ‘A family business is simply one that’s influenced by a family or a
family relationship, and that thinks of itself as a family business.’

◆◆◆

It is only in the past decade or so that family businesses have been appreciated more fully for
their contribution to society. This long-overdue recognition in part reflects the preference of
family-owned concerns themselves (whatever their size) for anonymity: historically, family firms
have liked to stay offstage and have shunned public attention.

Among the most substantial of these contributions is to job and wealth creation. In the UK,
for example, family firms generate more than a quarter of national GDP. They employ more
than 12 million people – one-third of the working population – and contribute over 20 per cent
of the UK tax take. On a different scale, family firms in India employ 79 per cent of the private
sector, which equates to 129 million jobs.

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Family firms boost economic growth by fostering new businesses. ‘Families are the first and
most common source of finance,’ notes Concordia University’s Rob Nason. ‘Many people
assume venture capital drives new business, but actually they fund less than one per cent of
them.’ Family backing, by contrast, funds up to 85 per cent of start-ups.

The reason that the sector has attracted attention from the financial world, however, is the
accumulating evidence that family businesses consistently outperform public companies on
pretty much every indicator. Take revenue growth, for instance: EY’s annual benchmark of the
world’s largest 500 family firms found that total turnover represented by these businesses
grew by almost 10 per cent last year, compared with 8.6 per cent across the Fortune 500.
Looking back over a longer period, Credit Suisse’s Family 1000 report, which tracks share price
and return on equity, reveals that the top 1 000 publicly-listed family
businesses have outperformed the global equity market by an average
5 per cent each year since 2006. Family businesses pursue
Experts have sought to understand why it is that family firms are diversification to reduce
able to outdo their non-family counterparts: they have uncovered
a number of common characteristics shared by the best of these long-term risk, or to
firms. First and foremost, family business leaders typically have
long-term horizons: they focus, as one private banker puts it, ‘less on grow – or both
the current quarter than on the next quarter-century, when the
succeeding generation will come of age’.

This concern for stewardship causes them to manage assets differently to many of their
corporate peers, who are chasing after quarterly returns. For one thing, they are more prudent
with debt. ‘They will take on debt but get rid of it quicker than somebody else,’ remarks Justin
Craig, clinical professor of family enterprise at Kellogg School of Management, interviewed for
The Economist. Debt is necessary to grow, but they still want to maintain control.

Leaders of family companies have lived through decades of economic cycles, so they do not
overreact to these ups and downs as some of their non-family rivals might. Craig explains:
‘The market may be heating up, but family firms will put their cash away. They know the market
will come down, and that’s when they step in. They ride the cycle differently.’

Family businesses that endure over time are more often than not built on the strong
foundations of the family’s own value system. These values – or rules for living – typically begin
with the founder and are transmitted down through succeeding generations. A common way
of behaving is created, which helps to explain what the family stands for and why they are in
business together. During periods of challenge and transition, when others might flounder,
the family business that lives by shared values derives strength by its adherence to them.

Longevity is also a factor that helps family businesses to be more successful innovators.
While they spend more of their money on R&D (at least in the United States and Asia)
than their peers, more significant is the fact that family members’ long relationship with the
firm and their deep knowledge of the market improves their success rate in new investment
bets. And once they make a decision, they are quicker to act on it, using, as EY research has
found, ‘the advantages of greater agility and streamlined decision-making to move faster than
their non-family business peers’.

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Family businesses in Africa

Only 1% of the world’s largest family businesses are in Africa, but …

They are the backbone of the economy:

Family businesses account for

75–85% of Africa’s GDP

They are resilient:
86% of family firms
in Africa believe they have a clear sense of values and
purpose (Above the 79% global average) (PwC)

They are optimistic about growth:

Family businesses in Kenya, Nigeria and South Africa
were in the
top 10 most confident
that they will grow ‘aggressively next year’ in a survey
spanning more than 50 countries (PwC)

Africa is now home to many large family

owned businesses:

Up to 140 African family businesses have revenues of

US$500million
or more (McKinsey)

There is increasing evidence, too, that family-owned businesses diversify more than others.
They may pursue diversification to reduce long-term risk, or to grow, or for both reasons.
Many expand into businesses within adjacent industries, or up and down the value chain.

At its best, a multi-generational family business is able to strike a unique balance between
tradition and change. It will adapt well to technological and other change even as it continues
to embrace tradition. ‘These companies are not going to be the first adopters, but they are
quick to respond,’ says Craig. Younger family members – who are sometimes more alive to
disruptive business models, digitalisation and other emerging trends than their seniors –
have the ear of the family’s leadership. Leaders benefit from their input, as well as sometimes
knowing that, as Craig says: ‘The longer they sit on their hands, the more frustrated the
younger generation becomes.’

Looking ahead to the next quarter century, families in business will face new realities that
may test even their strongest features. Long-term thinking has been an asset in the past, but,
says Rob Nason, ‘rapid technological advances are shortening product lifecycles, challenging
long-term plans’. Nason also worries that the lure of job security, traditionally a feature of
family firms, may hold less appeal for ‘today’s workforce, which is more mobile and not
necessarily looking to settle down’.

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Pride of Africa
The latest EY ranking of the world’s largest companies reveals that only four, or 1 per cent,
of the world’s largest 500 family-owned companies are in Africa. Judging by this benchmark
alone, one might be forgiven for thinking that African family businesses are laggards,
when compared to the rest of the world. Especially to mighty Europe, where 49 per cent of the
top family firms reside.

Such a conclusion would be rash, however. Lest we forget, Europe

has benefitted from 400 years, largely unbroken, of free markets and Most indigenous
capitalism. Family businesses have been able to grow and transition
in this relatively benign economic environment. The Paris-based African‑owned family
Les Hénokians speaks powerfully to this long history. A membership
organisation for mainly European family firms continuously in business businesses have not yet
for over 200 years, some of its member companies date their origins
to the 17th century. had the opportunity
Contrast this with Africa. Most of the continent was colonised by to pass from one
European countries until the 1950s or 1960s, during which time few
indigenous Africans could participate in business activity. After gaining generation to the next
independence, most sub-Saharan African governments (South Africa
being the main exception) opted for socialist economic systems,
with state-owned enterprises at their heart. It was only in the 1990s, following the collapse
of the Soviet Union, that liberalisation came, and entrepreneurship was able to take off.
Most indigenous African-owned family businesses have not yet had the opportunity to pass
from one generation to the next.

It is refreshing therefore to learn from a recent McKinsey study that Africa is home to
700 companies with revenue of more than US$500 million per year. South Africa – which has
benefited from a century-and-a-half of capitalism and industrialisation – is home to almost half
of Africa’s large companies. These companies have grown faster than their global peers in local
currency terms, and are more profitable than them in most sectors.

McKinsey estimates that up to 140 of these are family firms – and many of these will likely
be owned by multi-generational South African families. While no reliable data exists for the
next level down, it is probable that there are at least five times that number of businesses
turning over US$50 million or above – large enough to be significant players in their own
markets. Consider, for example, that in Uganda, 21 family-owned businesses have revenues of
US$60 million-plus, including four with revenues above US$500 million.

◆◆◆

What makes so many family-owned companies impressive is their sheer resilience

– often through the political upheaval and economic turmoil that has bedevilled much of
Africa over the past half-century. On top of the normal pressures of doing business, they have
had to find ways to operate day-to-day in conditions where the rule of law is weak, cronyism is
strong, corruption is rife, economic growth is poor and a currency devaluation may occur next
week. Even in 2018, PwC found that family businesses in Kenya and Nigeria continued to list
corruption as one of their top two business challenges.

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International expansion
Large family-owned and other privately-held companies
are increasingly growing through expansion beyond their
own borders. Mckinsey estimates that these large firms
earn more than half of their non-domestic revenue from
adjacent regions where they have geographic proximity
or strong cultural ties (McKinsey). As a very broad-brush
general trend:

North African companies wishing to expand see

west Africa, particularly the Francophone countries,
as a priority market

West African companies tend to stay in their home

region; Nigeria is a preferred destination market

East African companies tend to stay in their home region

Southern African companies tend to stay in their region,

with some expanding to other markets, primarily Kenya
and Nigeria

The importance of community and family in these environments cannot be overstated.

‘Who can you trust to do business with? It’s a real problem,’ says Jonathan Rosenthal,
Africa editor of The Economist magazine. ‘Trust levels are generally low throughout the
continent, and so people tend to be more comfortable dealing with family, or outside of that,
people from the same community.’ Families operating businesses will often turn to their close
familial and social connections – especially those with whom they share common values
– to access resources and information, raise capital and even enforce agreements.

‘Ties of community are particularly strong among ethnic minority owned businesses’,
notes Rosenthal. Their presence in many of parts of Africa – whether the Indian community
in east Africa, the Lebanese and Syrian diaspora in west Africa or the various mixed European
communities in South Africa – has provided major boosts to entrepreneurship, business growth
and employment, wherever they have settled and made their home.

Family businesses in Africa survive and thrive in all kinds of ways. One popular strategy is
diversification. Sometimes, this is borne out of necessity, as the MD of an Africa-based private
equity firm explains: ‘There’s a danger in being too tall a poppy in one industry – things can
change quickly politically and economically in a country, and you can find that suddenly you
don’t have a business anymore. Diversification is a kind of insurance policy to reduce your
exposure.’

Family firms often diversify to grow when there is no other choice. In smaller African
economies, it is common for successful businesses to find they have become too big in one line
of business for their home market. Unable to expand into other countries because of capital
controls, they grew a business in a new area at home. But opportunism and the entrepreneurial
instinct are also factors. Kamal Shah, head of the Africa group at international law firm

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Stephenson Harwood, works with business families throughout the continent: ‘It’s in the blood’,
he says, ‘You run a business, and one day you come across a great real estate deal. So suddenly
you’re a developer, and then maybe that leads you into the hotels business. You build a hotel
near the airport, and now you’ve spotted an opportunity in transportation, and so it goes on.’

◆◆◆

Parental woes
In extreme cases, the process of bequeathing the family business can become messy; even more so,
where multiple children are involved. The late mogul MKO Abiola successfully built one of Nigeria’s
biggest business empires – consisting of an airline, a chain of newspapers, real estate, fisheries and
retail – but the business died with him. Abiola is believed to have left behind more than a 100 children.
He also left a will that insisted all but six of his children take DNA tests before benefiting from it.
Almost a decade after his death in 1998, tests revealed that one in five of those who claimed to be an
Abiola child was not.

Looking ahead, Africa’s family businesses are optimistic about the future. Near the top of
PwC’s table of family business leaders in 50 countries, charting those most confident about
‘aggressive’ growth for the next year are those in Nigeria (second in the table), Kenya (fifth)
and South Africa (eighth).

They have good reason to be optimistic. Africa as a whole is on a growth trajectory and has
robust long-term economic fundamentals. In an aging world, Africa has the advantage of
a young population and will soon have the fastest urbanisation rate in the world. By 2034,
the region is expected to have a larger workforce than either China or India.

There are signs that governance is changing for the better, too. Many parts of Africa are
more stable, the rule of law is becoming more embedded and corporate governance
(albeit with some prodding from overseas donors and investors) is starting to take root.
Long-time Africa-watcher Nic Cheeseman, professor of democracy at Birmingham University,
sees evidence that democracy can take hold in Africa: ‘Some of these processes are just
starting, and all are vulnerable to reversal,’ he says, ‘but there’s no longer any reason to doubt
that democracy can function in a number of African countries.’

Tests of longevity
For all their advantages, family businesses are prone to some serious and endemic problems
– and the atmosphere inside them can range from business-conducive to paternalistic to
argumentative, all in one day. Sibling rivalry, family feuds, nepotism, the potential loss of
entrepreneurship when leadership passes on to new generations: these are as common in
African family-owned companies as they are elsewhere. Because they are more complex than
other kinds of business, family businesses require more attention, planning and governance.
They do not always get it right.

Resistance to change is characteristic of many a business, not least because of the potential
for disruption and risk that it entails. Family businesses can be particularly stubborn, because
change can also involve challenging the ideals and practices established by relatives. This is
normal in family business anywhere, but perhaps even more so in those African businesses

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where the founder-patriarch has built the culture, vision and strategic goals of the business
over many years and through periods of civil unrest: his authority is unquestionable and his
rules are to be treated as absolute. As one second generation director of a large west African
family firm noted: ‘There is only one boss in my family – and what he says, goes!’

‘Patriarchs have done things their way and in the past have had to be very aggressive,’
says Kamal Shah. But as the business culture in many African countries becomes more
professionalised – including the appointment of outside managers and directors – ‘they need,’
adds Shah, ‘to be open to changing the way the business operates, and that can present huge
personal challenges.’

What people feel they
don’t get from other
business organisations
is an understanding of
Managing transitions represents a major challenge, and can often
make or break a family firm. In many companies, when the founder is
ageing, and the son or daughter is convinced that things need to be
done differently, the ensuing conflict can be extremely disruptive for
staff, suppliers and customers. ‘Because of the added dimension of
possible intra-family upset,’ says family business expert Peter Leach,
‘this is a much bigger challenge for family businesses than for others.’

how to deal with family Fewer than 30 per cent around the world survive to the third
generation as family-owned businesses. Given that the survival rate
challenges of African family firms beyond the founder’s generation is low, it is an
open question whether those in Africa will fare any better.

Evidence as to longevity of the top family businesses in emerging markets around the world
is mixed. There is some cause to be hopeful, in that the factors behind successful transitions
are now well-established. African family-owned businesses are more likely than they were
a generation ago to engage in succession planning, but it is still early days: in Nigeria, for
example, PwC found that while 77 per cent of family firm leaders say they intend to pass on the
business to their children, only 10 per cent have a formal succession plan in place.

The challenges do not stop with succession. Rivalry among siblings can represent a potentially
crippling obstacle to the successful future development of the business. Competitiveness
among siblings is par for the course in families. Indeed, it can contribute to the healthy
development of children as well-adjusted, coping adults, equipped to leave the parental home
and take their separate paths in life. But this normal growing apart of families is impeded in
a family business: childhood rivalry, say for a father’s affection, might be perpetuated into
adulthood, when it risks exerting a malign influence on decision-making or on the management
of the business.

It pays to share
‘For all its joys, owning a family business can sometimes feel like a lonely place to be,’
says Peter Leach: ‘Who do you talk to about the next generation? Who can you confide
in, who’ll understand and won’t have an axe to grind?’ It has been proven the world over,
he notes, that family businesses like to talk to each other in the kind of safe, confidential
environment offered by an organised family forum. ‘They gain a huge amount from these
conversations.’

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Andrew Keyt, clinical professor and formerly executive director at Loyola University’s Family
Business Center in Chicago, agrees: ‘What people feel they don’t get from other business
organisations is an understanding of how to deal with family challenges – and that includes all
the emotional and relationship issues they entail.’ When family business leaders talk to their
peers, ‘they feel kinship with others who grapple with those self-same issues: how to balance
what’s in the best interests of the family with what’s in the best interests of the business’.

Increasingly, business families across the globe have been joining

together in peer networks over the past 20 years. These networks I recently heard
bring together concerned and motivated members of family firms for
a series of learning activities and social events. By design, the activities someone say: “I go to
of these networks mix personal, family and business topics.
‘x’ to professionalise my
Family business forums vary considerably in size, scope and
membership. At their most local, they are an association of members business, and I go to the
who share close proximity to each other. Then there are the networks
organised at a national level. Many of these choose to join (or in some IFB to professionalise
case have been initiated by) an international umbrella organisation
for family businesses called the Family Business Network (FBN). the family.” I thought
Founded in 1989, FBN is based in Lausanne, Switzerland and currently
boasts a membership of more than 3 600 business-owning families in that was a nice way of
34 chapters, covering 65 countries.
describing some of the
Some forums are primarily educational in intent. As well as universities
and business schools, they also include the Business Families benefits of being part of
Foundation (BFF). Founded in 1990 by Canada’s Gaspé Beaubien
family, BFF promotes lifelong learning for business families worldwide our community
and supports them through the provision of subscription-based online
and offline courses, events and proprietary research. Elizabeth Bagger, IFB (UK)

Finally, there are a few networks built around the specific needs of
large-scale family businesses. One of these is Campden FB which
provides a membership club for ‘ultra-high net worth’ (US$100m or
above) business families around the world. Founded in 2001, Campden organises over
20 conferences each year around issues associated with family business, investing and
philanthropy. It also provides peer-to-peer meetings, educational programmes, research, news
and wealth management services.

Another of these, more exclusive, is BDT – founded in 2009 by the eponymous Byron D Trott,
who previously ran investment banking at Goldman Sachs, and has been described by Warren
Buffet as the only banker he trusts. BDT’s model is an advisory-network-cum-merchant-
bank for more than 200 global ‘closely-held’ businesses, most of which are family-owned.
The banking arm, which manages funds in excess of US$10 billion, invests in family businesses.
The network arm organises a global summit, held every two years; family retreats, where a
small group of business-owning families gather over a weekend to discuss their family business
challenges and opportunities; and a week-long summer programme for next generation leaders
that covers topics such as investment, leadership and communications.

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A similar concept is Club b, established in 1995 as a non-commercial, non-profit forum for

substantial family offices. Its aim is to provide authoritative insight on global market trends and
asset allocation through its annual events. Invitation-only Club b has since evolved to include
over 600 international family offices worldwide.

Whatever their differences, however, the core purposes behind every successful family
business forum are fundamentally the same: to develop a safe environment for discussing
the special difficulties of combining family and business; to connect with others facing similar
challenges, and learn from their experiences and insights; and to develop skills to become more
effective in the individual’s role in the family and in the business.

Case study: an investment in governance pays off

Andrew Keyt, clinical professor at Loyola University’s Family Business Center, recalls the experience
of the third-to-fourth generation owners of a US$400m family business who joined as members.
‘During their first seven years, they learned about the importance of family governance, and over this
period, instituted a family constitution, regular family meetings and brought their first outside directors
onto the board. In their eighth year of membership, the patriarch fired his son-in-law, who’d been the
heir apparent; this created huge tension, and put both the business and the family under great strain.
But because of all the things they’d put in place to manage family conflict, they were able to maintain
the conversation and work through the problem. Five years later, they appointed a non-family CEO,
their board now has a majority of directors drawn from outside the family, and the business continues
to be successful.’

◆◆◆

Elizabeth Bagger has been director general of the Institute of Family Businesses (IFB)
– which is also the UK chapter of FBN – for the past six years. She believes organisations like
IFB are among the few places where family firm leaders can truly share and learn: ‘When you’re
a family business owner or member, you don’t have natural peers to talk to,’ she says. ‘It’s
difficult to talk to your spouse or relatives because they can’t always be objective, and it’s
difficult to talk to friends in non-family businesses because they don’t get it. The only people
who really understand what it’s like to be in a family business are your peers in other family
businesses.’

Family forums such as the IFB bring their members together in a variety of ways. The main
event is usually an annual summit, or conference, which might be attended by up to,
say, 200 people. The summit is a chance to listen to expert speakers from around the world,
learn from families telling their story of challenges faced and overcome, and most valued of all,
the opportunity to meet and network with other business families.

Much of where the real sharing happens, however, is at smaller, more intimate roundtable
events. These are typically organised for 12 to 15 families, and topics will range from family
communication, values, governance, the next generation, and bringing in outside managers
and directors, to the distribution of share ownership, dividend policy, wealth management,
investment opportunities and philanthropy.

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Also popular are immersive group trips to a member’s business, where the group experiences
the family and the business, both on the shop floor and at home. ‘Some places in Colombia
aren’t safe to travel to on your own,’ remarks Claudia Gomez, who runs the FBN Colombia
chapter (founded in 2006, and now with 140 member companies and 1 400 individual
members), ‘so we organise trips to visit businesses you wouldn’t go to by yourself’.

Elizabeth Bagger is keen to stress the importance of active participation: ‘The more you put in,
the more you get out,’ she says. ‘When we ask a family to speak at an event or to host a visit,
they really have to delve deep when they prepare. It can produce some real “a-ha” moments
for the speakers, as well as for those listening who will relate what they hear to their own
family and their own experience.’

‘Trust and lifelong friendships form over time,’ notes Henry Samuelson, Campden FB’s
membership and education director. ‘That creates an environment where people are open to
opportunities to do business with each other.’

The assurance of confidentiality is paramount. ‘Confidentiality is the most appreciated value,’

notes Claudia Gomez, ‘everyone knows that what they say in a meeting stays in the meeting,
and will never be repeated outside.’

Andrew Keyt makes a similar point. He says owners are naturally apprehensive at first about
joining a network – and the question he is most often asked is: how do I know that what I say
will go no further? ‘So gaining families’ trust is key’, he says. ‘Everyone must be confident that
what they say does not leave the room, but you also have to have the right people in the room
– other families whom they respect as their peers.’

Case study: a conversation with the uncles

Ten years ago, one of the founding families of FBN Colombia faced a looming crisis. The company was
run by 16 brothers, at the time aged between 50 and 90 years old. There was no succession plan –
and the family had no board, no governance and no family policies for guidance; the brothers were
in charge and the next generation had no power. A ‘second gen’ member, aged 30, took the initiative:
she asked FBN to facilitate a series of conversations among the ‘next gen’ family members. As a result,
the ‘next gen’ became close and felt empowered to approach their uncles. Seeing that their nieces and
nephews were united as a group, the uncles showed willing and gave them space to introduce family
policies and similar changes. 
Ten years on, the company has benefited from family policies overseen by a family council, a board
which includes outside directors, and a family office. The female members of the family are now
treated on a level playing field with the men. The business itself is in rude health.  

Membership of FBN chapters and similar networks is strictly by invitation only. Claudia Gomez
explains that potential new members are admitted to the Colombian chapter only on the
recommendation of existing members and after thorough vetting to ensure they are the right
‘fit’. Members, she says, value being part of ‘a private club of family businesses’.

A safe place to talk 15

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Another important principle on which the best family forums are built is non-solicitation
– the idea that the network should never be used to sell products or services to other
members. There is a balance, however, to be struck between non-solicitation and giving
members’ access to trusted experts and professionals whom they may not have found
themselves. ‘We’ve spent years getting to know the best-in-class experts and boutiques, and
putting them together with our members when they need them is
something they really value,’ says Henry Samuelson. Elizabeth Bagger
The owner of a multi- agrees: ‘Our members trust us. They’ll call us and say, I’m going
through this or that – and we’ll connect them to advisers or to other
generation business families who’ve been through the same thing and have come out the
other end.’
wants to address
◆◆◆
‘the challenge of how
Among the most active and engaged members of family forums are
to prepare, empower the next generation, typically those in the 18 to 40 age bracket.

and build passion in our
future generations’
Next generation members form their own community within the
forum. ‘It’s been the place where they have done most of their
personal development,’ says Bagger. She notes that the community of
relationships is what the next generation value the most: ‘These are
people I can both learn with, and party with.’

Claudia Gomez has seen how participation in these groups can be a priceless investment
in the future: ‘For the next generation, the network is hugely valuable. They meet other
young people and get to know and trust each other over time. It gives them a powerful set of
relationships with the future CEOs of our country’s best family businesses.’

An idea whose time has come?

Given the demonstrable value that multiple generations of family firms derive from regular
organised meetings with their peers, how strong is the appetite for such a forum in Africa?

To explore this question, the Mary Oppenheimer Daughters family office (MODO),
in collaboration with a leading business school in Africa, recently interviewed a diverse
group of major family-owned businesses across the continent to ascertain their views.

Overall, owners were very positive about the proposition of an invitation-only network for
prominent family businesses. Some noted they had attended events at other international
business networks, but felt that these had not fully catered for their needs: in part, because
they were not attuned to the special dynamics of family-owned businesses, and in part because
they ‘lacked the Africa context’.

The opportunity to share and learn was welcomed by those interviewed. ‘There are a lot of
commonalities’, noted one owner. ‘Family businesses pass through a lifecycle, and you can learn
a lot from those that’ve already gone through the stage you’re at.’ Another, whose business has
well-established structures that include a family constitution, family council and family office,
expressed himself happy to share his own experiences and challenges: ‘All the families are at
different stages. It’s good to have discussions with people in similar positions – some older,
some younger, some who’ve gone through similar experiences, and some who haven’t.’

16 A safe place to talk

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What keeps Africa’s family business leaders up at night?

Macroeconomic risk
Expanding business into new countries
Regulatory constraints & unpredictability
Family tax & wealth planning
Philanthropy
Succession planning
People & performance management
Operating in highly competitive markets
0 20 40 60 80 100
■ Yes ■ Neutral ■ No
MODO interviews 2018

Concerns about transition featured in many of the interviews. For one owner, the issue
was longevity: ‘I’d like our business to last a hundred years. Two main issues I’d raise are
sustainability and succession.’

Succession was a topic that occupied both founders – ‘I worry about the next generation: will
they want to come in, and if so, can they add value?’ – and their children, one of whom said he
was looking to have ‘a mature conversation, as succession is a taboo subject in my part of the
world!’ The owner of a second-to-third generation business wanted to address ‘the challenge
of how to prepare, empower and build passion in our future generations’.

Some were interested in hearing the experience of others who had brought non-family
members into the business. For one family, the issue ties in with succession: ‘Do we bring
in professional managers to work with the next generation?’ For another family, there are
practical issues on which they would value input, for instance: ‘We’ve created a board with
independent members, but we struggle to find good quality non-execs.’

Conferences and meetings in different regions across the continent were an especially popular
idea. ‘Imagine having a group of influential family businesses going to Rwanda for a regional
conference,’ enthused one founder-owner. ‘You’d get audiences at the right level. And that
would give you impact in Rwanda. Next you could move it somewhere else. It gives you clout to
gain visibility in these countries.’

Several of the businesses interviewed are looking to grow through international expansion
within Africa – and a pan-African network of like-minded family businesses has significant
appeal. For one owner: ‘Our own markets are getting small, so going international is our next
step’. Another ‘wants to learn how to become a multinational company within Africa.’

Detailed knowledge was vital to succeed in a new market, said one: ‘There are “multiple
continents” in Africa – you can’t just take what works in one country and simply apply the same
thing in another country.’

As in all things business, it all comes down to people: who can you work with and who can you
trust.

A safe place to talk 17

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What owners would value most from a pan-African forum

Regional events with other FB owners

FB newsletter or magazine
Annual pan-African conference
Access to executive coaches
Research, case studies etc
Seminars & short courses
International immersive tours
0 20 40 60 80 100
■ Yes ■ Neutral ■ No
MODO interviews 2018

The owner of a large family-owned multinational put it thus: ‘Networking would be the real
value for us. The biggest thing when you’re buying a business or taking on a partner is the
people, and the hardest thing is knowing whether you can trust the people. You can’t just go
to a place unless you’ve got a person you can trust there. That’s exactly why I think this idea of
a network is good. Because you know people have been vetted and you’re of the same nature
and have similar business values; you’re not fly-by-night. Those are the kind of people that are
hard to meet.’

◆◆◆

So, is the time now right to create a forum to connect Africa’s prominent family-owned
businesses? A place for them to discuss and learn more about family dynamics, governance,
succession, wealth management, and a network to meet potential future business partners?

The appetite is certainly there among owners. Africa is on the rise, and the leaders of its
family firms recognise their vital role in driving economic growth and development on the
continent. They see no shortage of opportunities to expand into new areas and new territories.
The challenge, they appreciate, is to leverage the strengths of being in business as a family and
address the issues that might stand in the way of continued success. It’s not so much that a
forum would help, observed one owner, ‘I’d say it’s almost required’. ■

18 A safe place to talk

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Suggested further reading and resources

Asoko Insight: weekly updates on Africa markets, including family-owned businesses.

Business Families Foundation: online materials, including short films, to support families in
business.

Edward D Bewayo, Family Business in Africa: A Comparison with the US-Western Model, Journal
of Global Business Issues, Spring 2009: a useful article exploring the distinctive aspects of
sub-Saharan African family-owned businesses.

Randel S Carlock and John L Ward, When Family Businesses are Best, Palgrave: excellent
introduction to family dynamics in business by two leading practitioners.

Credit Suisse, The CS Family 1000: this index has tracked performance of the top global family
businesses, relative to the performance of global equities, for the past 13 years.

IFERA, Family Businesses Dominate, Family Business Review, Dec 2003: a little old now, but still
a useful introduction to the global contribution made by family-owned businesses.

Dennis T Jaffe and James Grubman, Cross Cultures: How Global Families Negotiate Change
Across Generations: fascinating study of cultural styles around the world and how they impact
family businesses in each respective culture. 

Peter Leach, Family Enterprises: The Essentials, Profile Books: one of the best guides to the
issues that arise in family businesses, and how to manage them.

McKinsey Global Institute, Lions on the Move II: Realizing the Potential of Africa’s Economies,
Sept 2016: the most recent McKinsey research and analysis of Africa’s economic potential.

Murithi and others, Where Less is More: Institutional Voids and Business Families in
Sub-Saharan Africa, International Journal of Entrepreneurial Behaviour and Research, 2019:
interesting study of small-to-medium family businesses in Africa and how they survive in
challenging external conditions.

NMMU Family Business Unit: research produced by this centre specialising in the
small-to-medium African family business sector and based at the Nelson Mandela University in
Port Elizabeth.

PwC Global Family Business Survey: valuable insights into the thinking of the world’s business
families, researched by PwC and updated annually.

A safe place to talk 19

FAMILY
FORUM building ties, deepening knowledge, driving success

MODO
Mary Oppenheimer Daughters family office (MODO) was established in 2016. MODO is responsible for
managing the commercial and philanthropic activities of Mary Slack (née Oppenheimer), daughter of the
late South African businessman and philanthropist Harry Oppenheimer and grand-daughter of Sir Ernest
Oppenheimer, and her four daughters. MODO’s interests and outlook are global but it has deep roots in Africa,
with four generations of investing experience on the continent.

FAMILY FORUM
The Family Forum was established in 2019. A pan-African initiative by Mary Oppenheimer Daughters,
the Family Forum draws on a long history of supporting and investing in family-owned businesses across
the continent. The mission of the Family Forum is to strengthen the contribution of entrepreneurial families to Africa’s
development and, through building ties and deepening knowledge of the challenges faced by family-owned
businesses, to help drive the success of forum members.

For more information, email familyforum@modaughters.com