Family Business Goveernance and the Sustainability of the Family Enterprise

Abstract

This research explored the role of Family Business Governance and its influence on the sustainability of the sampled private businesses in Nama Sub-County, Mukono District. The research was grounded on the Agency Theory, and a descriptive case study design was used. The sample covered 80 entrepreneurs of private business in the fields of salon and hairdressing, metal fabrication, food processing and restaurants and market vending. Five business enterprises were selected using a quantitative approach with the purposive sampling method. The results indicated that strong involvement of family members in decision-making greatly facilitated sustainability of businesses. A well-developed system of governance affected positive long-term stability and strategic planning. Succession planning was found to be an effective variable determining the sustainability and the company with regularized succession plans showed elevated rates of engagement and inspiration in successors. This study determined that good governance structures improve stability, accountability, and continuity in family business. The research suggested the need to strengthen the processes of decision making by laying down effective structures, which could assure accountability, transparency and efficiency. Future studies should consider the issue of gender in leadership aspects, succession planning and decision-making. Moreover, other research ought to investigate effects of non-family consultants, outside Board members and professional advisors on governance forms