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South Africans aren't keeping it in the family

By unknown | Feb 08, 2008 | COMMENTS [ 0 ]

Zweli Mokgata

Zweli Mokgata

More than half of South Africa's family businesses are running without a plan outlining the future ownership of their businesses.

The accounting firm, PriceWaterhouseCoopers, released its first annual family business survey yesterday.

It revealed that 40percent of all family businesses were destined to change ownership within the next five years, compared to 25percent globally.

Out of these businesses only 30percent would go into the hands of another family member, compared to 51percent globally.

PricewaterhouseCoopers private company services leader, Andries Brink, said: "The reason behind this is that the new generation is unwilling to run the business.

"Younger people seem to be less confident about carrying on after their parents, and they seem to be less keen about staying in South Africa."

Family businesses are defined as those companies with at least 51percent of the shares held by a family member or related families.

The family members comprise the majority of the senior management team and the owners have the day-to-day responsibility of managing the business.

On the bright side, 83percent of family businesses showed growth and profitability compared with the global average of 75percent.


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