Abstract
Academic discussion on corporate governance and its related issues are clearly visible in any country with active capital markets. This suggests that good governance is a crucial factor for ensuring economic development. Of concern is the lack of continuity after the first generation of ownership and control. However, few studies can be found relating to smaller family businesses. With the aim of contributing to this knowledge gap, this study aimed at identifying the impact of family governance on the sustainability and continuity of family businesses in Botswana. A sample of 144 family-owned businesses based in Gaborone and Francistown participated in the study. Pearson r correlation was used to measure the relationship between the variables of the study. The results showed that there is a weak positive relationship between family governance and the sustainability and continuity of family businesses in Botswana. It was recommended that mechanisms must be put in place in order to enlighten the benefits of having Board of Directors and to implement effective governance structures and systems to sustain the businesses in the market beyond generations.
Highlights
The importance of small and medium enterprises (SMEs) throughout the world is well documented
It is against this background that a better understanding of the way in which governance structures and systems affect family businesses in Botswana should be fully explored for these forms of businesses to contribute to the economic diversification drive, and to deal with the growing youth unemployment as espoused by the Botswana Industrial Development Policy of 2014
The researchers concluded that family governance structures are not yet fully adopted by family businesses in Botswana
Summary
The importance of small and medium enterprises (SMEs) throughout the world is well documented These forms of businesses are the mainstay of many economies around the world. The Policy on Small, Medium and Micro Enterprises (SMMEs) in Botswana, Government Paper No 1 of 1999, highlights several characteristics that the government uses to distinguish SMMEs from large firms (Botswana Institute for Policy Analysis [BIDPA], 1999). These characteristics are in alignment with the findings of the numerous studies which have been carried out across the world, and include turnover as an important element used in classifying SMMEs
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