By Jackson Okoth
It is a bright sunny morning in the leafy suburbs of Nairobi’s Westland area and 60-year-old Timothy Kamau is seated at his palatial 10th floor executive suite offices, staring lazily at the heavy traffic on the highway below.
Although he knows it is time for him to climb down from the family business, now in its third generation, Kamau has not made up his mind of who among his three sons will take over this thriving exotic family-owned furniture business. Indecision on a crucial matter such as this is not confined to Kamau’s furniture business but is replicated across the country.
Experts are calling on Kenyan firms, especially small and medium sized enterprises, to have a succession plan. This is to ensure minimal disruptions when the owner dies or wrangles erupt among family members. A list of some of the most successful family-run business enterprises include Bidco oil refineries that is run by a second generation of the Vimal Shah family, the multi-million shilling Philip Ndegwa’s banking and insurance empire and Nakumatt supermarket chain.
Those that have been embroiled in bitter wrangles and court battles include the late Gerishon Kirima’s real estate business and Tuskys supermarket where sibling rivalry is boiling to the surface.
Former Cabinet Minister Kenneth Matiba’s business, which has run into trouble since his health deteriorated, is a classical case of a family business that has failed to move to the next generation.
“Many business owners ignore the idea that they will one day exit the business. But for their enterprises to survive, this attitude has to change,” said Kwame Ahadzi, Bank of Africa Managing Director.
He made these remarks recently during a Bank of Africa clinic organised for owners of small and medium-sized enterprises who had gathered at the Hilton Hotel to discuss succession planning for family businesses in Kenya.
Cases of poor succession planning leading to business collapse especially where the founder dies have become fairly common.
The situation becomes even more complicated where polygamy is a factor as siblings wrangle over control of assets, severely disrupting or even killing the business.
“The issue of who owns what shares in the family business or even how decisions are made is often forgotten. This can be source of problems in the future. There is need to clearly define who does what to reduce any conflict,” said David Muturi, Chief Executive Officer, Kenya Institute of Management (KIM).