In Africa, the need for a formal plan on leadership structure and transition has been exacerbated by a large number of family businesses where such procedures are often overlooked and the same staff simultaneously holds multiple positions.
According to a recent PwC report, about 76% of African
family businesses have no succession plans and 19% of them even deliberately
decided against such plans. Similarly, 50% of Nigerian family businesses had no
governance policies, yet 70% of them and 63% of African family businesses considered
sustainability to be the key driver of growth which is understandably hindered
by the above fact.
To help local businesses match their development pace with
growth expectations, below are 3 key strategies on business partnerships and
succession planning.
1. Set Up a Framework for Corporate Governance
Business roles in some organizations are often mixed
leading, to the lack of understanding of individual responsibilities. Thus,
non-executive directors can be involved in corporate management and lose their
major focus on independent supervision, while shareholders have an upper hand
in decision-making. A clearly established corporate governance structure will
help put the management, board and all other key internal stakeholders in their
rightful places, as well as adhere to an impartial governance process.
2. Implement In-House Managerial Training Programs
Many organizations experience a shortage of qualified cadres
to take the reins of corporate development if the CEO or other foundational
leader suddenly resigns or retires. Oftentimes, it is notorious for family businesses
where positions are distributed on kinship instead of merit. Purposefully
designed managerial training programs can fill the void of leadership skills
and prepare reliable successors for the leadership positions.
3. Adopt the Partnership Policy and Guidelines
The status of a Partner is often vague in partnership-based
businesses. Sometimes Partners even play the roles of Founders, Managers and
Employees of other levels. It is important to define the actual place of a
Partner in the organizational chart, design the criteria of admission and
appraisal for Partners, as well as create incentives for regular staff to
aspire to the Partner rank. As an example, there can be an equity scheme that
encourages regular employees to upgrade their status in exchange to an equity
stake in limited liability companies
It's important to stress the need to always follow legal
frameworks, such as dispute resolution procedures, for sufficient
accountability and transparency of the corporate affairs.
The views expressed in this article are the views of a
contributor at Business Insider Africa. It does not represent the views of the
organization Business Insider Africa.
source: pulse.com
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