By Francis

Copyright thebftonline

While family-owned businesses dominate Ghana’s private sector, it is crucial to point out that they face a precarious future unless they adopt structured succession plans and formal governance frameworks.

This came to light at the second Family Business Governance Workshop held with the theme ‘Family Governance and Legacy: The Family Constitution Blueprint’, where IFC officials stressed that absence of clear succession strategies remains one of the most significant threats to continuity of enterprises built by first-generation founders.

Indeed, the International Finance Corporation (IFC) has cautioned that many businesses risk collapse within a generation if these gaps are not addressed.

“Without proper structures, leadership transitions often result in conflict, fragmentation and eventual decline of the enterprise,” said Moez Miaoui, IFC Acting ESG Advisory Lead-Africa and facilitator for the sessions.

Family businesses play a significant role in economies worldwide and account for more than 50 percent of IFC’s portfolio, contributing around 70 percent of global GDP while generating about US$5.5trillion in value, providing 50–80 percent of jobs worldwide and representing roughly 25 percent of global market capitalisation.

In-country, they account for almost two-thirds of private enterprises in the country and employ a significant portion of the workforce, particularly in retail, agriculture, real estate and services. However, few are adequately prepared for intergenerational transfer of leadership.

IFC notes that the majority of Ghanaian family-owned firms remain highly founder-dependent, with limited delegation of authority. As founders age, the lack of clarity around succession creates risks not only for individual companies’ survival but also stability of the broader private sector.

“Long-term survival requires a system that outlives one individual,” Mr. Miaoui stated. Increasingly, disputes over inheritance, management control and ownership rights often erupt in the absence of formal governance structures, leading to stalled decision-making or costly legal battles.

The IFC urged family firms to adopt tools that strengthen governance. Evidence from other emerging markets suggests that family businesses with well-defined succession plans are more likely to survive beyond the second generation.