Page 9 - GrowSA News September

I N D U S T R Y P A R T N E R

FAMILY-OWNED BUSINESS IN PERSPECTIVE

The ensure food produc�on, the United Na�ons declared With this in mind, you realise how astonishing it is that
2019 to 2028 the decade of family farming. Boplaas is now in its 10 genera�on and Kongo Gumi,
th
Japanese temple builders, was founded in 508 AC and
“Before I stumbled on the concept of survived for 51 genera�ons. The golden thread through
all these years, according to the current leaders, is that
family-owned businesses, I did not really
they stayed true to their original values.
know what it was and that it is
the backbone of the economy of most “It is all about balancing the interest of the family with
the interest of the business, which is why an outside
countries in the world,” André Diederichs, advisory council and a family council should be
Chief Convener of FABASA, states when he appointed,” says André.
talks about this unintended career change
he made.

In 2000, he was the Na�onal Marke�ng Manager for SMEs The success of family-owned
for Old Mutual and as part of his role, he was sent to a businesses can be summarised
conference in Puerto Rico, where 60 countries came
together to discuss business development. Family-owned into three concepts:
businesses was a dominant theme and opened his mind to
the importance of this business format.
1. Planning: First, “if you fail to plan, then you

Back home, he inves�gated the situa�on regarding family- plan to fail,” André quotes
owned businesses. He soon realised that even though there when emphasising the importance of
were many family-owned businesses, too many were not planning. A�er comple�on of the Family
well-structured, and that there was li�le assistance to help Business Cons�tu�on, the most important
families to sustain and grow their businesses for future
genera�ons. plan is the succession plan, and it should be
done earlier rather than later. Do not wait
Hence, the Family Business Associa�on of South Africa un�l re�rement! Expose the successor to
(FABASA) was established with Old Mutual as the founding the business from an early age.
sponsor and André, as the captain of the ship, has now been 2. Selec�on: The oldest child or the oldest son
involved in this industry for over 20 years.
Three criteria define family-owned business might not be the best choice for a
successor. It is important that the successor
interna�onally, i.e.
must be selected through a proper process
and not on sen�ment or tradi�on. If a
The family must:
competent and willing successor cannot be
1. Control most shares in the business;
found in the family, a successor can be
2. Control the board | business strategy and;
3. Have the inten�on to safeguard the business recruited from outside, but this person will
s�ll be accountable to the family.
for the next genera�on.
3. Stewardship: In the words
To ensure that the criteria is met, a family business of Carl van der Merwe from Boplaas, “We
cons�tu�on must be in place to connect the exis�ng are borrowing the farm from the next
genera�on with the incoming genera�on and to ensure genera�on (children), and each genera�on
that the future is determined through a set of rules in the
cons�tu�on. should treat their responsibility as such.”

The lack of a cons�tu�on and/or proper succession plan
is reflected in the scary sta�s�cs that only 30% of family-
owned businesses move successfully from the first to the
second genera�on and only 14% will be passed on Go to www.fabasa.co.za for more informa�on.
successfully to the third genera�on.

September | GROWSA MONTHLY NEWS 9