The Managing Principal and Head of Tax and Legal at W8 Advisory (a wealth management advisory practice based in London), Mrs. Bimpe Nkontchou, discussed the benefits of nurturing the next generation to be actively involved in a family business, so as to ensure a smooth transition and to secure the long term future of the business.
She noted that businesses in Africa rarely outlive the founder-owner due to a lack of planning for the future. This is one of the major challenges to development for countries in Africa.
“One of the challenges on the African continent is that many African entrepreneurs build significant businesses, but fail to institute a sound succession plan to enable the transition of the business to the next generation. It is often the case that a business folds up after the lifetime of the founder, to detriment of the family members and to the economy. I advocate strongly that African entrepreneurs should find a way in which to encourage their children (as the next generation), to be involved in the management and growth of the business, to ensure the founder’s legacy is preserved”, she said.
Bimpe Nkontchou made this statement, as Guest Speaker, at the Breakfast Seminar hosted by the International Women’s Forum (IWF-Ghana) on Monday 4th June. The aim of the seminar was to educate and encourage women across the country, on the importance of financial planning and wealth preservation.
She noted that children should ideally be encouraged at the early stages of their lives, to appreciate the business activities of the family business. However, she was quick to add that the child does not necessarily have to follow in their parent’s footsteps by working in the company, but should be nurtured and encouraged to feel responsible as a stakeholder, possibly holding shares and, as they get older, becoming involved in the governance and strategy of the business, to supporting its future growth.
“Even if non-family members are employed to manage the business, the child can still add value by being involved in the governance (as a board member), thus ensuring that he or she supports the growth and possible expansion of the business in a way that secures the legacy of the founder. The failure to plan for business continuity past the lifetime of the founder can have serious repercussions. We are all aware of well know family businesses that have become household brand names in developed countries in Europe, the USA and Asia which have existed for many generations, to the benefit of those countries, creating jobs, advancing technology and making significant contributions even outside their countries. African companies need to emulate this pattern of ensuring the lasting sustainability of businesses, for the benefit of the continent as a whole. ”
The seminar also discussed the important theme of “why women should be financially savvy”. The objective was to stimulate a responsible conversation on the need for women to be financially literate, in order to ensure that they can plan and implement solutions for the long-term financial security of themselves and their families.
Bimpe said: “In some African cultures, women have been traditionally conditioned to leave the management of theirs (and theirs family’s) finances to the men in their lives. The major flaw with this approach is that women are then unprepared for any family or personal emergencies where they might find themselves alone with the burden of bearing significant financial expenditure, or having to make decisions that impact on their family’s finances.”
She explained the importance of women being financially literate, whether married or not. She encouraged women, especially as mothers, guardians or mentors to the younger generation, to ensure that financial literacy be an important part of the lessons that they pass on to the younger generation.
The seminar discussed how wealthy African families could improve their philanthropic activities by ‘giving’ in a sustainable and long-term manner. Bimpe explained that it has been proven that the best form of philanthropy is where it is done in a structure, sustainable manner, with clear objective, and with a means of measuring the impact on the beneficiaries. Structures like foundations or social impact investment funds are becoming the preferred methods that enable families and responsible companies to contribute to the development gap in many African countries.