Experts: Without Governance, Family Businesses Risk Collapse across Generations

Sunday Okobi

Family business leaders and governance experts have raised concerns that many Nigerian enterprises may not survive beyond their founders unless deliberate systems are put in place to sustain them.

The warning was the central message at the International Family Business Conference 2026 held at the Lagos Business School, where stakeholders shifted focus from business growth to long-term continuity.

Speaking at the conference with the theme: ‘Beyond Survival: Governance and Culture as the Foundation of Lasting Family Legacies’, the Chairman of Channels Media Group, John Momoh, said many Nigerian businesses were never designed to outlive their founders.

He noted that while survival may help to start a business, it does not guarantee sustainability, “because what builds a business is different from what sustains it.”

 Momoh cited global statistics showing that about 70 per cent of wealthy families lose their wealth by the second generation, while 90 per cent lose it by the third, describing the trend as worrisome.

According to him, “The collapse of several notable businesses, both locally and globally, underscored the risks of poor governance, lack of innovation, and weak succession planning.

“Some Nigerian firms fail after the demise of their founders because they are built around individuals rather than enduring systems.”

Momoh, however, noted that some families had sustained wealth across generations by focusing on governance, culture, and systems rather than profit alone.

“Enduring family businesses are anchored on governance structures, cultural continuity, and deliberate succession planning.

“Governance provides clarity on decision-making and reduces conflict, while culture defines shared values and purpose beyond profit,” he said.

Momoh said Channels Television was built on purpose and conviction, not immediate profitability, at a time when Nigeria’s media space was largely government-controlled. He added that governance at the organisation ensured that family membership did not automatically translate into executive authority, describing the approach as critical for institutional growth.

 Also speaking, the Director of the LBS Family Business Initiative, Okey Nwuke, emphasised that many business owners overestimate their preparedness for succession.

He said building enduring enterprises requires deliberate structures supporting governance, succession, and long-term sustainability.

Nwuke said the LBS initiative is aimed at driving best practices across management, governance, and society by encouraging business families to share experiences, including successes and failures.

He added that the initiative also gathered direct feedback from family business leaders on governance and culture in sustaining legacy across generations.

The director noted that effective succession planning required clearly defined roles, documented frameworks, independent oversight, and transparent ownership structures. He warned that when leadership transition depends on personal influence rather than institutional systems, businesses become personality-driven instead of system-driven.

Providing a broader context, the Deputy Vice Chancellor of Pan-Atlantic University, Uchenna Uzo, said family businesses dominate Nigeria’s economic landscape but struggle with longevity.

He said family businesses account for about 50 per cent of enterprises in Nigeria and contribute more than half of the country’s Gross Domestic Product.

He, however, noted that only about 30 per cent survive beyond the first generation. Uzo attributed the low survival rate to weak corporate governance frameworks and poor organisational culture.

According to him, “Major risk confronting family businesses is not failure, but success without planning for continuity and succession.

“Governance helps to build systems beyond individuals, while culture ensures that family values are embedded in business operations.”

In her remarks, the Dean of Lagos Business School, Olayinka David-West, said the conversation around family businesses is evolving beyond structures to behavioural discipline.

She said the family business conversation had evolved from building structures that outlive founders to embedding governance as a daily discipline. She described family businesses as entities shaped by relationships, values, and shared identity, noting that maintaining unity becomes more complex across generations.

David-West said governance and culture remain the twin pillars for sustainability, while disciplined capital strategies drive long-term growth.

She added that the conference would explore governance systems, shared family culture, and aligned capital structures to support long-term vision. She urged participants to institutionalise not just policies but behaviours that enable legacies to be built and sustained across generations.