More than 60 per cent of family businesses in Nigeria remain under the control of first-generation founders, raising concerns about succession risks and long-term sustainability, according to the Lagos Business School.
Speaking at the 2026 International Family Business Conference in Lagos on Thursday, the Director of the LBS Family Business Initiative, Dr Okey Nwuke, warned that the dominance of first-generation leadership exposes businesses to high failure rates during generational transitions.
Nwuke explained that findings from a recent survey indicate that most family-owned firms in Nigeria have not moved beyond the founding generation, making succession planning an urgent priority.
“If you look at that statistic, what it also draws to you is that once you have the majority of us within the first generation, then the issue of succession becomes critical. The next thing that should be on the mind at that point is who takes over the business,” he said.
According to the study, which surveyed about 365 family businesses, more than 60 per cent remain controlled by first-generation founders, about 29 per cent have transitioned to the second generation, while only a small fraction have reached the third generation.
Nwuke noted that the pattern reflects a long-standing challenge where many businesses struggle to survive leadership transitions.
“Succession to us, from everything we have seen, is the true test of governance practice being in place. That is really why a lot of businesses fail at that point of succession,” he said.
The survey also revealed that governance structures guiding leadership succession remain weak across most family enterprises. Only 28 per cent of respondents indicated that they had formal and transparent succession processes in place.
“If only 28 per cent say that they have, that means 70 per cent don’t have. No reason why, if you go by that narrative, over 70 per cent fail at the point of transition between the first and second generation,” Nwuke added.
He explained that although many family businesses demonstrate strong financial discipline and long-term thinking, these strengths often fail to translate into continuity without proper governance systems.
“Capital can help you cushion short-term shocks, but it cannot help you manage long-term issues,” he said.
Nwuke also identified ownership concentration as a major challenge, noting that more than 90 per cent of family businesses operate without external investors or independent oversight. While this structure enables faster decision-making, he said it limits access to capital and reduces external scrutiny.
“Sometimes when you have an outsider asking those questions, it might shine the light on the dark spots,” he noted.
The LBS director also pointed to gender imbalance in leadership within family businesses, revealing that nearly 70 per cent of respondents were male, and called for increased participation of women in entrepreneurship and leadership roles.
Delivering the keynote address, Chairman of Channels Media Group, John Momoh, echoed the concerns, noting that many Nigerian businesses were built for survival rather than legacy.
“Survival is not legacy. What helps you start a business is not what sustains it,” Momoh said.
He cited global data showing that 70 per cent of wealthy families lose their wealth by the second generation, while 90 per cent lose it by the third, largely due to weak governance structures and poor adaptation.
“The families that last don’t just focus on making money. They focus on building systems. They focus on governance. And they focus on culture,” he said.
Momoh stressed that sustainable family businesses must be anchored on three key pillars—governance structures, cultural continuity, and deliberate succession planning.
“Succession is not just about identifying a successor; it’s about grooming that successor,” he added.
In her remarks, the Dean of Lagos Business School, Professor Olayinka David-West, said the conversation around family businesses has evolved from survival to sustainability and legacy building.
“The real question is not whether we will survive. The real question is, will we endure with clarity, cohesion, and purpose?” she asked.
David-West said governance and culture remain the “twin pillars” required to sustain family enterprises across generations, supported by disciplined capital strategies.
“Survival is no longer the benchmark. Endurance is the new standard,” she said, adding that the school aims to equip family businesses with governance frameworks, cultural alignment strategies, and succession planning tools to support successful generational transitions.
The conference, themed “Beyond Survival: Governance and Culture as the Foundation of Lasting Family Legacies,” brought together business leaders, founders, and stakeholders to discuss structural and cultural barriers limiting the longevity of family-owned enterprises in Nigeria and across Africa.
