by Radu Magdin*
They are the backbone of national economies. From textile dynasties in India and diversified groups in Brazil, to shipping houses in Southeast Asia and agribusiness leaders in Nigeria, families still control the commanding heights. Their scale makes them systemically important and their continuity makes them culturally vital.
Yet, as these businesses mature, they face shared challenges: how to pursue growth without diluting identity and how to globalise without scattering the family glue that held them together in the first place.
The challenge is not unique to one region. In São Paulo, Manila, Mumbai, Lagos or Jakarta, family businesses are standing at similar crossroads. Their founders built on trust and hustle. Now their heirs must build on systems and foresight.
Too often, family ownership is dismissed as a weakness. But the evidence says otherwise. The real task is to adopt a roadmap of best practices that keeps families decisive, while making their businesses credible, investable and fit for global competition.
Growth vs. Control: a productive tension
Growth brings its own tension. But growth doesn’t have to mean giving up the reins. It means learning to steer a faster, larger ship, sometimes with a trusted co-captain alongside. The instinct in many family-owned businesses is to fear dilution, to protect control at all costs. It is often a tightrope walk between ambition and control. But the lesson from across the Global South is that growth and control are not opposites. Handled properly, they reinforce one another.
Thai agribusiness groups, for example, have used partnerships to secure technology and market access while preserving decisive family influence. In Africa and Brazil, several industrial families have relied on temporary instruments such as preference shares, which allow them to raise capital and still reclaim full control once expansion pays off. The lesson is clear: external resources can accelerate ambition, provided the family sets the terms.
Strong families can protect decisive influence while welcoming professional managers and outside capital. The secret: engineer rules that preserve long-term stewardship but prevent short-term drift. Without that engineering, two traps await. Some families keep businesses “right-sized” for comfort, missing out on economies of scale. Others scatter into absentee ownership, optimising for prestige rather than productivity. The winners design structures that do both: keep the compass of family values while professionalising execution.
The Playbook in practice
If there is a roadmap for Global South family businesses, it is about sequencing the right moves and making them stick.
Governance beyond family consensus
Every family business eventually learns that instinct alone is not enough. Informal trust may work when a company is small, but once it spans multiple markets, rules matter more than handshakes. The transition that families make is from personality-driven leadership to institutionalised governance. In practice, this means engineering the table, not only filling the seats. Independent directors with sector expertise, risk awareness, and financial discipline are no longer cosmetic additions but sources of credibility. A chair who is not from the family often strengthens credibility. Add a governance veteran to chair audit and risk.
Separate the family council from the board so emotion doesn’t crowd out strategy. Written constitutions and shareholder agreements are not paperwork for lawyers, they are the safety nets that keep disagreements from becoming destructive. And the families that share performance openly, clarifying who decides and who is consulted, find that governance becomes less about limiting freedom and more about freeing the business from bottlenecks.
Expanding capacity
From governance, the logic flows to capital. Growth in volatile markets almost always requires more money than a family can provide on its own. The mistake is to think that raising outside capital means losing control. The smartest families negotiate financing structures (convertible instruments, preference shares, joint ventures) that expand capacity without permanent dilution.
They define in advance how investors may enter and exit, how dividends are balanced against reinvestment, and which thresholds must never be crossed. External funding is therefore not a threat, but a lever. Families that match funding to their cash flows, hedge exposures sensibly, and hard-wire investor rights into agreements discover that capital can strengthen, rather than weaken, family stewardship.
Make succession a plan
Succession is the hardest test of all. Few moments test a family business more than succession. Too many families avoid the succession conversation until it’s too late. The result is predictable: uncertainty, power struggles, or even the unwinding of the business. Handing over the business is not as simple as handing over a title. It’s about preparing the next runners and ensuring the race goes on beyond the current finish line. Professionalising succession means matching roles to competence, not seniority. Competence-based appointments, external coaching and exposure outside the family business are emerging as best practices.
A well-designed plan addresses the both structures - who owns, who governs, who manages - but also the psychology of transition, creating room for renewal rather than rupture. It is about preparing the heirs to lead and preparing the seniors to let go. In South Asia, some families now encourage next-generation members to first prove themselves outside the family business, to gain experience and credibility before returning to take the helm.
New Markets, New Mindsets
International expansion frequently forces business families to confront their own ways of working. It’s a stress-test for the family’s governance and values. But going global is no longer optional: supply chains, capital markets and consumer bases are already globalised. A family constitution drafted when you operated in one country might need revisiting when you’re active in ten. Suddenly, issues like handling international talent, complying with multiple regulatory regimes and managing cross-border joint ventures become front and center. Families that succeed rarely attempt this alone.
In Latin America, many have partnered with established global players, accepting a measured sharing of control in exchange for technology, compliance know-how, and reputational capital. In South Asia, others have set up local advisory boards in key markets, blending regional expertise with family oversight. Southeast Asian groups have used secondments to build cross-border instincts long before they take senior roles at home. These practices make internationalisation less of a gamble and more of a deliberate process.
On the other hand, next-generation members, often educated abroad and exposed to new ideas, might question traditional methods more openly. Rather than view this as a threat, wise family business leaders treat it as an asset, essentially importing a global mindset into the company.
In the Global South, where opportunities shift quickly and competition is unforgiving, the families that endure are those that embed discipline before anyone demands it. This foundation allows both the business and the family to thrive across generations.
Avoiding common pitfalls
Family businesses often stumble not because of lack of ambition, but because of avoidable mistakes. Mixing family council discussions with board decisions creates confusion and mistrust. Over-reliance on informal agreements leads to disputes when conditions change. Expanding abroad without compliance or local partners wastes capital and credibility. Ignoring succession until a crisis forces it erodes both family unity and investor confidence. The best safeguard is simple: codify rules before they are tested, communicate them consistently, and revisit them annually.
A One-Year roadmap
In the first quarter, the priority is to reset the compass. Families should put the new rules of the game in writing. Established businesses rarely lack rules or agreements, but many operate with outdated ones. This is the time to revisit the family constitution, refresh the shareholders’ agreement and bring them in line with current realities. At this stage, it is also vital to decide on the handful of numbers that really signal whether the business is on track and to make sure they are reviewed consistently. A clear dashboard of performance indicators should be put back at the center of discussions, cutting through the noise of legacy reports.
The second quarter is the time to put governance into action. Many families fund growth the way they always have, but global competition demands sharper structures. Financing must match strategy: joint ventures for risky expansions, debt tied carefully to cash flows and equity only with clear entry and exit rules.
The smartest families set the rules of entry and exit before capital arrives, so trust is established at the start. This is also the quarter to set new norms with investors: concise quarterly updates, transparent dividend policy, and clear boundaries on veto rights. Within the family itself, structured council meetings with clear agendas prevent sensitive issues like dividends, employment, or liquidity from spilling into day-to-day operations.
The third quarter should be devoted to succession and talent. This is the point where too many families falter, waiting until a crisis forces a change. Instead, families should identify successors early and match leadership roles to competence, not seniority. Next-generation members should gain exposure outside the family business or through structured rotations inside it, before stepping into senior roles.
External coaching helps sharpen their perspective, while an emergency plan ensures the business does not lose direction if transition comes suddenly. Alongside this, families should strengthen internal discipline with rules for related-party dealings, confidential channels for grievances, and basic protections against fraud and cyber risks.
The final quarter is when families should look outward. Expansion into new markets cannot be based on instinct alone; it requires a clear-eyed view of market size, regulatory ease, stability, and costs. The entry route must also be chosen carefully: distributors offer speed, partnerships balance risk, and direct investments provide full control but demand greater readiness. Wherever the family chooses to expand, compliance should be built in from the start, and local expertise should be embraced as an ally. The year should close with a frank review of strategy, cutting away distractions and stating clearly how capital will be invested in the next phase.
One year will not solve every challenge, but with steady steps each quarter, a family business can move from good intentions to disciplined execution and from discipline to enduring growth.
Conclusion
Sustainable growth doesn’t mean giving up control, it means setting the rules that keep ambition and stewardship moving in the same direction. It is about growing boldly without losing the helm, about designing stewardship that scales. At its heart lies the four “S” rule: Structure, Strategy, Succession and Scale. Taken together, these principles form a playbook that helps family-owned businesses balance growth with continuity, ensuring resilience and prosperity across generations.
*A strategic communications analyst and consultant. He has advised the Prime Ministers of Romania and Moldova
By: N. Peter Kramer
