Poor governance and weak succession planning threaten the survival of many family-owned enterprises, Lagos Business School has warned. It called on family businesses to adopt governance structures to help build lasting legacies.

In a statement, the school stated that formal governance frameworks would help family businesses establish clear roles, expectations, and decision-making processes, enabling them to transition successfully across generations.

Speaking at a webinar titled ‘Next-Gen Ready: The Family Business Success Blueprint,’ organised by the LBS Family Business Initiative, the Director of the initiative at Lagos Business School, Dr Okey Nwuke, warned that most family enterprises collapse after the founder’s generation due to weak governance systems.

“Over 70 per cent of family businesses globally do not survive beyond the second generation, and the ones that do share a common trait—intentional governance and structured succession planning,” he said.

He stressed that governance remained the lifeline for family enterprises seeking long-term sustainability, adding, “A family business without a governance framework is a ticking time bomb. Good governance is not just a business tool; it is a family philosophy that ensures harmony, accountability and continuity.”

The director of the LBS initiative noted that business owners must move from informal decision-making to formal systems that guide both family and business operations.

“Governance is a deliberate process that moves families from the kitchen table to the boardroom. Business owners must establish formal structures that define roles, expectations, and decision-making processes within both the family and the business,” he said.

Nwuke asserted that many Nigerian family businesses rely heavily on emotional relationships and informal decision-making, which often become liabilities as enterprises expand. “The absence of structure breeds confusion. Governance gives direction, protects relationships, and ensures that both the family and the business flourish together,” he said.

He urged founders to begin documenting family values, vision, and behavioural guidelines, even if it starts with a simple document, noting, “It is not enough to be successful. What matters is that success can be sustained.”

Also speaking during the session, the Chief Executive Officer of Construction Kaiser Limited, Igbuan Okaisabor, said governance played a critical role in building sustainable family enterprises.

“Governance doesn’t have to start big. You can begin informally, through regular meetings, documentation, and involving trusted people in decision-making. What matters is that the process is intentional,” Okaisabor said.

He noted that governance frameworks help family businesses manage conflicts, clarify dividend policies, and build transparency in financial decisions.

“When everyone understands the direction of the business, how profits are reinvested, what capital is for growth, and what is available for distribution, there’s less tension. Transparency builds trust, and trust sustains continuity,” he said.

Okaisabor warned that poor governance had destroyed many once-successful family businesses, adding, “I have seen grandchildren of billionaires become tenants. When the business disintegrates, the family often follows.”

He also emphasised the importance of merit-based participation for family members working in family enterprises.

“In my own company, we make it clear that when family members join, they do so based on competence, not sentiment. You’re not joining as my cousin or nephew; you’re joining as a professional who must deliver results,” he said.

Speaking on succession planning, Okaisabor said organisations should groom future leaders internally to ensure continuity. “Every key position in our company has at least two successors being trained. We expose them to management meetings so they understand the business deeply.”

He added that governance frameworks should also contain clear rules on appointments and exits, stating, “When you formalise roles and terms of engagement, removing or replacing a director becomes a matter of procedure, not emotion. Good governance ensures that people know when to come in and when to step out.”

In her closing remarks, the Senior Programme Manager of the Family Business Initiative at Lagos Business School, Oreoluwa Adeyinka, invited participants to the Third IFBC 2026 Conference scheduled for March 26, 2026, at the Ecobank Pan-African Centre.

She said the conference would focus on governance and organisational culture as foundations for building enduring family businesses.

“What we are advancing here is a deeper conversation about legacy. Through strong governance and shared values, family businesses can move beyond survival and position themselves to thrive across generations,” Adeyinka said.

Reiterating the importance of proactive governance, Nwuke urged family business owners not to delay putting structures in place.

“God forbid is not a strategy. Only deliberate governance and proactive succession planning guarantee sustainability,” he said.