TOP AFRIC AN COMPANIES 107 THEAFRICAREPORT / N° 108 / JULY-AUGUST-SEPTEMBER 2019 Letting go gradually: Jean Kacou Diagou, founder of NSIA Participations, and his daughter Janine Diagou, CEO TAAHRLREEIGKHIDTS How do successful familyowned African rms beat the odds to survive past the rst generation and continue to evolve? By NICHOLAS NORBROOK Hassen Khelifati, the chief executive of Alliance Assurances in Algeria, recalls the brutal change in minimum capital requirements in the insurance industry that required a quick financial injection in 2010. “It was quite a difficult conversation with the family to get them to open up their equity and go towards the market, but now we are in agribusiness, food, education,” he recalls. African capitalism is a tapestry of companies, which are often family owned. The management of family companies bring its own set of problems, like improving governance and handling successions. Alliance had one of the happier trajectories. It is not the only path available. Take Nigeria’s Diamond Bank. Set up by Pascal Dozie in 1990, it was an innovator and market leader in several categories. Pascal handed the task of running the bank over to his son Uzoma Dozie, who became CEO in 2014. Things did not go well, and the bank’s death spiral ended when it was bought by Access Bank in late 2018. There is a saying beloved of money managers: ‘The first generation makes it, the second generation spends it, and the third generation blows it.’ Luc Rigouzzo of Amethis Capital says: “In my career in both Latin America and Africa, I have seen tragic stories where family groups didn’t have the courage to tell people [read ‘other family members’] that they needed to behave like shareholders and not managers and get out of the operational side of things.” Rigouzzo has long worked with family businesses. He reminds those he works with that just because you own it, doesn’t mean you should necessarily run it. This challenge has become a priority for Rita Maria Zniber of Morocco’s Diana Holding, who wants to avoid the third-generation curse: “We are a family group that has only really just started to open up to the kind of corporate governance that will ensure our sustainability.” Be wary of nepotism The group recently restructured its agricultural companies into a sub-holding and sold 22.6% of the equity to Fipar-holding, an investment fund owned by Morocco’s state-owned Caisse de Dépôt et de Gestion. “It is these institutional partners that allow you take the right path and especially allow you to be certain that nepotism will never be the Achilles heel of the group,” Zniber says. FAMILY BUSINESSES
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