Family Businesses Fuel Growth in Emerging Market Economies, IFC Handbook Now Available in 21 Languages
Eight out of ten businesses around the world are family-owned. In emerging markets, family businesses represent both the largest source of private sector job creation and the majority of micro-, small- and medium- sized enterprises.
Family-owned businesses are particularly thriving in low- and middle-income nations and some experts predict they will make up nearly 40 percent of these markets’ largest companies by 2025.
In June 2018, IFC published the Amharic version of its highly popular Family Business Governance Handbook, which is now available in 21 languages. Since the initial release of the English language version in 2007, the handbook has become the most downloaded of all IFC’s corporate governance publications.
“Good governance is good business for family-owned companies”, noted Sanaa Abouzaid, IFC’s corporate governance lead for the Middle East and North Africa and the handbook’s author. Furthermore, Sanaa stated that “these language translations are extremely helpful, because they contextualize the knowledge and best practices in their environment and are a critical aspect of IFC’s push to create local markets and opportunities.”
Tools and Guidance for Family Businesses
IFC’s handbook offers a concise and hands-on guidance on good family business governance practices. A complement to IFC’s broader portfolio of governance resources, it suggests best practice approaches to resolving common family business dilemmas, such as succession planning, managing into the next generations, and defining family, board and senior management roles.
The Potential is Enormous
When family businesses reach a certain organizational life-cycle they need to embrace controls, structures and procedures that will create a firm foundation of good corporate governance, helping to ensure sustainability into the second, third, and later generations of family ownership. As the number of family businesses in emerging markets continues to grow and mature, demand is increasing for tailored guidance on how to implement appropriate governance structures.
Corporate governance consultants, universities, international development institutions, and other market players are relying on the IFC Family Business Governance Handbook as a key knowledge reference in their work with family companies.
IFC Family Business Governance Handbook - Global Examples
Lebanon:
IFC’s own corporate governance teams make use of the local language versions of the handbook as they work with family companies in emerging markets around the world. And these companies are seeing positive outcomes as a result of their governance upgrades. For instance, with the assistance of IFC’s regional corporate governance team, Lebanon-based SABIS® developed a family employment policy and succession plans—both of which were critically needed, given the age of the founders, the expanding number of family members, and the lack of formalized procedures. Today, the fourth generation of owners is steering the education company to even greater successes, as its reach extends to 20 countries and 70,000 students.
Kyrgyz Republic:
In the Kyrgyz Republic, ongoing efforts by Altyn-Ajydaar to strength its internal controls, and formalize procedures for family employment—among other governance improvements recommended by IFC’s corporate governance team—have yielded significant results. The company, the nation’s leading producer of corrugated packaging with a 70 percent local market share, was able to access the capital it needed to grow, with a $2.2 million IFC loan to support the company’s expanding business. Recently, IFC rewarded Altyn-Ajydaar’s continuing corporate governance improvements by reducing the loan spread, yielding annual savings of more than $27,000.
Related Links:
Handbook: IFC Family Business Governance Handbook, all language versions; English, French and Spanish are in their fourth edition
Editorial: Family Institutions: The Realities of Implementation, Tharawat Magazine, Issue 28, 2015
Editorial: Good governance holds the key for family business, Ethical Boardroom, Winter edition 2014
Video: Family Business Governance: Examples from Egypt and Colombia, April 2014
Video in Spanish: Gobierno de Empresas Familiares: Ejemplos de Egipto y Colombia, September 2015
Publication: When grandpa is also the CEO - resolving differences in family-owned businesses, Private Sector Opinion 28, September 2012
August 2018
