The governance gap in Nigerian family businesses
Half of Nigerian family businesses have no governance policies at all, more than twice the global share. Most have no documented succession plan. The data is from PwC, and it describes the L5 Governance layer.
Crelligent Research5 min read
The numbers
Many of Nigeria's mid-market enterprises are family-owned or founder-led. PwC's Nigeria Family Business Survey, last run with interviews between October and December 2020, compares them with family businesses worldwide1.
| % of family businesses | Nigeria | Global |
|---|---|---|
| Have no governance policies | 50% | 21% |
| Have a family constitution or protocol | 9% | 28% |
| Have a robust, documented and communicated succession plan | 25% | 30% |
| Say they have a strong leadership team in place | 56% | 71% |
Source: PwC Nigeria Family Business Survey 20211.
The same survey found that just over three-quarters of Nigerian family businesses report a clear sense of values, but only 31% have them documented1.
PwC's earlier 2018 survey looked at strategy. Only 33% of Nigerian family businesses had a formal mid-term strategic plan, against 49% globally, while 53% expected to change their business model, against 20% globally2.
Why this matters
In the ESRE OS, Governance (L5) is about who can approve what, how exceptions are handled, and who answers when things go wrong. When none of this is written down, decisions travel to the top. The founder or CEO becomes the approval process, and the business can only move as fast as one person can decide.
The strategy figures point to Business Design (L1). Expecting to change the business model without a written plan for the next few years means the change happens by reaction rather than by design.
Succession is where both layers meet. A succession plan that is not documented and communicated is not really a plan: when it is needed, the business has to work out its governance at the worst possible moment.
What these figures can and cannot say
The data is from 2020 and covers family businesses, not all mid-market enterprises. PwC does not publish a separate Nigerian sample size in the report. Read it as a strong signal, not a benchmark. The inaugural AEHI edition will measure governance directly, as one of the five layers, across Nigerian mid-market enterprises, and will test our third hypothesis: that exceptions are resolved by going to the top rather than through clear approval limits.
Three questions for your leadership team
- Which decisions can only the founder or CEO make today? Which of them could be delegated with a written limit?
- If the CEO were unavailable for three months, who would approve spending above your largest routine payment?
- Is your strategy for the next three years written down, and do the people expected to deliver it know what it says?
Take the free diagnostic to see how your enterprise scores on Governance and the other four layers, or see the evidence charts.
Sources
- 1.Nigeria Family Business Survey 2021, PwC Nigeria, 2021. Interviews 5 October to 11 December 2020. pwc.com
- 2.2018 Nigeria Family Business Survey, PwC Nigeria, 2018. pwc.com
These are published third-party figures, not AEHI results. The inaugural AEHI edition, which measures Nigerian mid-market enterprises directly through the ESRE OS diagnostic, is in preparation.
