Family businesses are the ‘unsung heroes’ of global economy – PwC
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GUEST - Esiri Agbeyi, PwC Africa Family Business Leader, says: “Family businesses must stay nimble to leverage evolving tax and trade frameworks. With sound guidance, family enterprises can adapt to policy shifts while sustaining growth and job creation. Coordination between African governments is also essential for harmonising tax policies and reducing red tape, so family businesses can optimise opportunities, comply with disparate rules, and focus on building prosperity.
Family governance
What is encouraging is that more than half (52%) of respondents say that families are starting to involve younger generations (between the ages of 26 and 35) in decisions about managing wealth. A similar proportion (56%) introduce them to advisors at the same age, however families wait longer before involving NextGen in important decisions or giving them voting rights: more than half (56%) of respondents said their families wait until their children are over 35 for this. That said, younger generations do not always have to wait so long, as four in 10 respondents say their families give children a say between 26 and 35.
Political stability
Political stability ranked as the fourth highest topic for discussion this year on a global basis — one position lower than 2022. The majority of wealthy families said they were concerned about political instability within countries, typified by political polarisation and rising nationalism. These families are taking political stability and geopolitics into account far more than before, not just in their investment decisions but also in how they structure their overall wealth. For many families, this means refraining from investing in places where they believe the geopolitical situation might lead to added complexity or, at worst, a loss of assets.
Philanthropy
Philanthropy retained its place as the fifth most discussed topic by family businesses. Many families view philanthropy as an important way to give back to society, creating a positive impact and providing family members with a purpose that binds them and brings their values to life. “Discussing how philanthropy aligns with family values can foster cohesion between an extended international family’s different branches and generations,” Agbeyi says. “Involving the NextGen at a young age can also instil pride, responsibility, identification with family values, and foster a long-term commitment to specific philanthropic activities.”
The 2023 survey affirms that global family businesses are once again facing a less predictable world, and one in which black swan events have a habit of materialising on a regular basis. It’s a more difficult world for preserving legacies and the family business’ wealth and purpose. That makes careful long-term planning and structuring more important than ever. More importantly, achieving this is not simply a once-off exercise but an ongoing journey involving the whole family.
Family governance
What is encouraging is that more than half (52%) of respondents say that families are starting to involve younger generations (between the ages of 26 and 35) in decisions about managing wealth. A similar proportion (56%) introduce them to advisors at the same age, however families wait longer before involving NextGen in important decisions or giving them voting rights: more than half (56%) of respondents said their families wait until their children are over 35 for this. That said, younger generations do not always have to wait so long, as four in 10 respondents say their families give children a say between 26 and 35.
Political stability
Political stability ranked as the fourth highest topic for discussion this year on a global basis — one position lower than 2022. The majority of wealthy families said they were concerned about political instability within countries, typified by political polarisation and rising nationalism. These families are taking political stability and geopolitics into account far more than before, not just in their investment decisions but also in how they structure their overall wealth. For many families, this means refraining from investing in places where they believe the geopolitical situation might lead to added complexity or, at worst, a loss of assets.
Philanthropy
Philanthropy retained its place as the fifth most discussed topic by family businesses. Many families view philanthropy as an important way to give back to society, creating a positive impact and providing family members with a purpose that binds them and brings their values to life. “Discussing how philanthropy aligns with family values can foster cohesion between an extended international family’s different branches and generations,” Agbeyi says. “Involving the NextGen at a young age can also instil pride, responsibility, identification with family values, and foster a long-term commitment to specific philanthropic activities.”
The 2023 survey affirms that global family businesses are once again facing a less predictable world, and one in which black swan events have a habit of materialising on a regular basis. It’s a more difficult world for preserving legacies and the family business’ wealth and purpose. That makes careful long-term planning and structuring more important than ever. More importantly, achieving this is not simply a once-off exercise but an ongoing journey involving the whole family.