A recent report by the Lagos Business School’s (LBS) Family Business Initiative has raised alarms over the succession readiness of Nigerian family-owned businesses, revealing that only 22.8% have completed formal succession plans. The findings were shared at the 2025 LBS International Family Business Conference held in Lagos, where business leaders, succession experts, and stakeholders gathered to address the growing threat to continuity and legacy within the sector.

Succession Planning Lagging Behind

According to the report, based on a survey of over 130 family business leaders between October and December 2024:

  • 57% are still developing a succession plan.
  • 20.2% have not started at all.

LBS warned that this lack of formal succession structures threatens wealth preservation, business sustainability, and intergenerational continuity.

“The absence of structured succession planning endangers the legacy and sustainability of family businesses,” the report stressed.

Next Generation Reluctance

Perhaps more troubling, the study highlighted waning interest from successors:

  • Only 24.6% of business owners said their children were interested in the business.
  • 58.8% described their children as indifferent.
  • 16.7% reported outright disinterest.

Speakers at the conference called for early exposure, structured mentorship, and career path planning to cultivate interest and prepare the next generation. One second-generation CEO remarked, “Leadership must be earned, not inherited.”

Another first-generation founder urged objectivity:

“If the next generation isn’t ready or willing, businesses must look beyond bloodlines to ensure sustainability.”

Retirement Delays Threaten Transition

While 65.5% of founders plan to retire between 55 and 65, a significant 34.5% intend to stay in charge past 70. The report warns this may block succession efforts and stifle innovation.

To counteract this, panellists advised gradual transitions, with founders moving to advisory roles while successors gain operational control.

Attitudes Shifting on External Leadership

While family control remains paramount, some openness to professional leadership is emerging:

  • 14.9% are fully open to non-family leadership.
  • 28.1% see it as a temporary solution.
  • 35.1% are indifferent.

Still, cultural trust issues and hesitation remain hurdles to broader acceptance.

Timing and Governance Matter

The report also examined the timing of onboarding successors:

  • 51.8% prefer successors join after secondary school.
  • Others recommend waiting until post-university or after gaining external experience.

The consensus leaned toward a blended approach—balancing early business exposure with outside professional development.

LBS concluded with a strong call for governance, recommending family councils and boards to promote merit-based decisions.

“Without intentional planning, many Nigerian family businesses risk collapse. Early planning, inclusive leadership development, professionalisation, and strong governance are critical for successful transitions,” the report asserted.

The findings serve as a crucial wake-up call for Nigerian family enterprises to urgently prioritise succession planning, or risk fading into obsolescence.