Governance before growth: the decision that shapes the future of business groups

What sets enduring groups apart

McKinsey studied the attributes of enduring family-owned businesses and found that fewer than 30% reach the third generation of family ownership, although those that do tend to perform well against their corporate peers. Their five common attributes are clear rules on the family’s role as shareholder, board member and manager; an ownership structure that allows growth to be funded without losing control; strong governance with a long-term portfolio strategy; professional wealth management; and foundations that pass values on from generation to generation (McKinsey).

None of those attributes is about operations. All of them are about how decisions are made. That is the most important lesson for the region’s business groups: governance is not a compliance requirement, but the condition for growing without breaking the company.

The question that brings order to everything

In our work with a business group with several companies under one holding, the most productive question in the diagnosis was not operational. It was about identity: should the holding operate the companies or capitalize them? The answer changes the structure, the size of the corporate center, shared services, managers’ indicators and the way the board reviews performance.

An operating holding centralizes decisions, shares services and seeks cost synergies. A capitalizing holding allocates capital, sets return targets and leaves operations to each company. Both models are legitimate. What doesn’t work is the implicit mix, in which the holding intervenes in operations without taking responsibility for the results.

The board buys numbers

A lesson we have validated in several projects with business groups is that the board doesn’t buy consulting; it buys a business case it can approve and mobilize over several years. We assumed price was the main barrier to purchase. The projects showed otherwise: the board decides when it sees the quantified impact, the investment required and the horizon over which it pays back.

That has design implications. The diagnosis must end in a plan the board can approve, with prioritized initiatives, separate impact and cost curves and clear owners. And the governance of the transformation must be connected to the board: a monthly steering committee that reports to the board, not a parallel project.

We also learned that transformation plans must align with the strategic direction the board already has under way, and integrate the initiatives that have already been approved. A plan that ignores the board’s prior decisions loses legitimacy in the first session.

Professionalizing without losing identity

Family-owned business groups have an asset that corporate groups envy: a strong identity, a legitimate pride in what has been built and a long-term vision. They also have a vulnerability: caution toward outsiders and a fear of transforming without a demonstrable return.

Successful professionalization respects that identity. In our experience, the changes that are best received are the ones that protect the company’s accumulated know-how (its standards, its way of serving, its reputation) while bringing order to decisions. The worst received are those that arrive as an external template.

Governance for young companies, too

Governance is not only an issue for established groups. Benká Group carried out its own corporate governance diagnosis in 2025, as a young company with several partners and business units. The lesson was the same one we see in our clients: defining decision-making bodies, partners’ rights, conflicts of interest and entry and exit rules early on keeps growth from turning implicit agreements into disputes.

Cost of capital and financial discipline

Governance also has a financial dimension that mid-sized groups tend to underestimate. McKinsey observed that family-owned businesses typically operate with less debt and at a lower cost of debt than their corporate peers. In the region, however, we often find the opposite: groups that financed their growth with short-term debt and whose financial costs weigh on profits in high-interest-rate environments.

A board with financial discipline asks about the return of each business line, the group’s capital structure and the use of cash flow. Those questions are uncomfortable when the company has always been run on the founder’s intuition, but they are the ones that open access to capital on better terms, whether from banks, investors or strategic partners. A bankable plan is not just a document for the board: it is the group’s calling card to its financiers.

Succession: the risk that gets postponed

The generational transition is the moment when governance is put to the test. If the rules on who can work in the company, how managers are chosen and how dividends are distributed don’t exist before the succession, they are negotiated during it, at the worst possible moment. We recommend that the groups we work with treat succession as an initiative with a timeline, not as a pending conversation.