Corporate Governance in the context of family businesses can be a slippery slope. Corporate Governance is already murky even for mainstream businesses. Thus for family-run businesses, it tends to be even trickier. In Zimbabwe, there are many family-run businesses. Issues of corporate governance for such businesses are usually problematic. The dynamics surrounding that are what I am discussing today. By the way, corporate governance is the framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company’s relationship with all its stakeholders.

Unhealthy Centralization Of Power

We do get that it is a family-run business and you can call the shots and all. However, you must not centralize power such that you do not consult with other stakeholders in the business. Decision-making in business should go through a series of processes. You cannot just pass decisions simply because you can and are displaying your power. You must consult and more importantly, you must delegate as much as possible. I know delegation and consulting before decision-making is hard for many. They feel it strips them of their power but that is not the case. Centralization of power is killing many family-run businesses in Zimbabwe.

Poor Succession Planning

It is all too common in Zimbabwe for family-run businesses to die along with their founder(s). This is usually because the founders fail to properly plan their succession. At times it is not even about them dying. They can suddenly fall terminally ill or some circumstances might make it impossible for them to actively run the business. The challenge is that most owners of family-run businesses do not plan for succession. They also mostly do not properly pass down principles and practices that will ensure the legacy lives on. This is seriously lacking in most family-run businesses in Zimbabwe.

Power Struggles

Another problematic area is one of the power struggles. In most family-run businesses there tends to be power struggles amongst siblings, parents and siblings, and so on. This is usually the case when they hold key positions in the company. It is also common to hear of spouses interfering in the affairs of the business even when they do not hold any position. Many family-run businesses crumble because of this and it all stems from a lack of well-defined organizational structures.

If there is proper corporate governance, people will know their roles and boundaries. The unfortunate result is that these power struggles end up being irrational and turn a blind eye to their negative effects on the business. For example, someone can do something as a way to sabotage or get back at someone. Yet that action will result in a negative bearing on the business. This is very common amongst family-run businesses in Zimbabwe and can even lead to people hurting or killing each other.


When a business is family-run there is a usual tendency to employ friends, family, or relatives. In some cases, it is usually meant to empower loved ones which are not necessarily bad. However, the common trend is that those loved ones are employed not based on merit. This will result in having a business run by people who are not skilled or qualified for their roles. This affects the productivity of the business in the long run. The other challenge with nepotism is that those employed via it tend to infringe on others. Just because someone is related to or they are friends with the business owner they can feel entitled to do whatever they want. This can involve not coming to work on time, not listening to anyone, and even bossing others around. Overall, that will affect the effectiveness of the team or teams involved. Nepotism is usually a recipe for disaster.

These are some of the issues that family-run businesses in Zimbabwe must be wary of. One of the best ways to do that is by running their businesses professionally. You need to have properly laid out processes and procedures. Roles and responsibilities must be well-defined. I can even advise you to hire a business consultant to take a look at your business and guide you accordingly. Family-run businesses should be multigenerational and it is possible if you decide to do things the right way.