Money Markets
By JOHN GACHIRI
In Summary
Kenyan family business concerns, like their global
peers, recognise the need to improve the way they are run to survive an
increasingly competitive market.
A report by consultancy PwC on family enterprises says 40
per cent of global businesses surveyed accepted the need to have proper
structures in the modern tough market.
PwC survey titled “Up Close and Professional: The
Family Factor Global Family Business Survey” says fierce competition and
pressure on prices are the factors informing a tough business
environment for all businesses.
A Kenyan top executive quoted in the report says
the enterprises will need to put in place good corporate governance
structures similar to global companies if they are to increase
profitability.
“It can be incredibly difficult to make any changes
within the company or control expenditure. With multi-national
corporations they have a set approach which we need to adopt – our
profits will increase with better governance,” said the report.
The survey interviewed top executives in 2,848
companies globally and was conducted between April and August this year.
Companies sampled had an annual turnover of between Sh444.7 million and
Sh88.9 billion.
PwC, however, says family business still benefit from fast decision making and a greater appetite to take on risk.
“Growth is strong and prospects are bright for
family businesses and private companies in Kenya. Their leaders believe
that companies like theirs benefit from agile decision-making and an
entrepreneurial mind-set, particularly when they focus on strategies to
support long-term sustainability, professional management, skills
development and innovation,” says Michael Mugasa, a partner at PwC
Kenya.
Other financial consultants have said proper corporate governance and other systems are a challenge for Kenyan SMEs.
“We have been told of people who are not preparing
financial statements, who do not have proper corporate governance
structures,” said KPMG chief executive Josphat Mwaura at a briefing on
this year’s Top 100 survey.
Family and small business also stand to access more
affordable credit if they put in place stronger corporate governance
structures.
Diamond Trust Bank
chief executive Nasim Devji said there was enough money available for
businesses but lenders are uncomfortable with SMEs that do not have
proper structures.
PwC said it expected to launch the Kenyan-specific
report on Wednesday. Most family businesses operate in an informal
manner but a number have transformed going as far as listing at the NSE.
They include ARM Cement owned by the Paunrana family and NIC owned by the Ndegwas.
No comments :
Post a Comment