A new survey by the Lagos Business School’s Family Business Initiative (LBS-FBI) has revealed troubling gaps in succession planning among Nigerian family-owned businesses, warning that many enterprises may not survive generational transitions without urgent intervention. The survey conducted between October and December 2024 covered over 130 family business leaders across diverse sectors, and its findings were presented at the 2025 LBS International Family Business Conference, which was held on the 27th of March, 2025, at the Lagos Continental Hotel, Victoria Island, Lagos. Despite a widespread understanding of the importance of succession, only 22.8 percent of businesses surveyed had completed a formal plan. A majority (57%) are still in the process, while (20.2%) have not started at all. According to the report, this lack of preparedness poses a serious threat to business continuity, wealth preservation and long-term growth. Read also: How Lagos traffic congestion impacts businesses The generation gap The study also highlighted growing concerns about the interest and readiness of the next generation to take over family enterprises. Just 24.6 percent of business leaders believe that their children are genuinely interested in the family business. Meanwhile, 58.8 percent feel their children are indifferent, while 16.7 percent describe them as disinterested. This generational disconnect could leave many businesses without willing or capable successors. Sharing their insights, the renowned family business leaders and experts that spoke at the conference recommend early exposure to the business, structured mentorship and having actively managed career paths for potential successors. They were of the view that these intentional steps by incumbent family business leaders make the business attractive to the next generation. They also urge families in business to consider alternatives, including non-family member successors for their businesses, in their succession decision-making processes. “Leadership must be earned, not inherited,” says one of the panellists, a veteran second-generation family business owner with over twenty-five years of experience as Chief Executive Officer in the electrical cable industry. Another vastly experienced first-generation family business owner advised that, “If the next generation isn’t ready or willing, businesses must look beyond bloodlines to ensure sustainability.” A yet insightful nugget from another widely experienced panellist is that “The heir that has the greatest hunger for success is the most deserving of leading the succession.” The importance of capacity building and the right kind of training was also unanimously supported by the panellists. “Such prolonged leadership by a long-time incumbent without any involvement of the potential successors can block succession efforts, reduce innovation and create future uncertainty.” When to let go? Retirement patterns among current family business leaders also raise red flags. While 65.5 percent plan to retire between the ages of 55 and 65 years, a significant 34.5 percent intend to continue leading well past 70 years. Such prolonged leadership by a long-time incumbent without any involvement of the potential successors can block succession efforts, reduce innovation and create future uncertainty. The report calls for more structured retirement planning and gradual leadership transitions to the identified successors. A hybrid model—where founders/incumbents move to advisory roles while successors take operational control—was identified as an effective compromise by panellists. Shifting attitudes toward non-family-member leadership. Interestingly, the study found a growing openness to non-family member leadership. About 14.9 percent of respondents are fully open to the idea, while 28.1 percent view it as a temporary option. An additional 35.1 percent expressed indifference. Read also: Aruwa raises $35m in move to back key businesses in Nigeria, Ghana This evolving mindset reflects a broader recognition of the need for professional expertise, especially as family businesses scale or diversify. However, many family firms still grapple with trust issues and cultural hesitation when it comes to outside hires. The conference recommends establishing strong governance structures for family businesses, including boards and family councils for effective oversight of both the businesses and the business-owning families, and to ensure that business leadership decisions are based on competence rather than kinship. When should potential successors join the family business? The question of when successors should join the business also yielded varied responses. 51.8 percent favour onboarding immediately after senior secondary school. Others support waiting until after university, postgraduate education or external work experience. Each approach carries pros and cons. Early involvement builds loyalty, while later integration offers maturity and fresh perspectives. The conference recommends a blended approach: allow successors to gain external experience but maintain close ties with the business through internships, mentorship and exposure to strategic decisions. Call to stewardship In conclusion, while the LBS-FBI survey highlights both the risks and opportunities inherent in family business succession, the conference offers valuable insights and practical strategies to harness the opportunities and mitigate the risks. Without such deliberate and proactive succession planning, Nigerian family businesses, many of which form the backbone of the country’s economy, risk leadership crises and potential collapse post the tenures of their founders/incumbents. However, with early planning, inclusive leadership development, openness to professionalisation and firm governance structures, these family businesses can transition successfully from one generation to the next. More knowledge and experiences from seasoned family business experts and leaders about family business management can be gained at our frequent conferences, seminars, webinars and workshops. You can reach us via mail at [email protected] to discuss the best on-site or virtual training for you and your family members or team.