In the pre-pandemic fiscal year, Bangladeshi family businesses had a mixed performance compared to their global peers in terms of growth, with fewer companies witnessing both growth and decline in sales.
However, as Bangladesh's economy has stunned the world with how it defied the Covid-19, family businesses here now are much more optimistic than their counterparts globally, reveals the 10th Global Family Business Survey by PricewaterhouseCoopers (PWC).
Based on its October-December, 2020 survey among 2,801 family business people, the international consultancy firm informed that in Bangladesh, 31% of family businesses are concerned that Covid-19 might lead to a reduction in their sales, while globally 46% of family businesses apprehend such a decline.
Citing that Bangladesh aims at an ambitious growth in 2022, but it is more cautious for 2021, the PWC said 74% of Bangladeshi family businesses are expecting business growth in 2021 while the global average is 65%.
For 2022, 86% of the globe's family businesses are hopeful about growth in sales, while in Bangladesh, it is 93%.
Noticeably, 39% of Bangladeshi family businesses are confident that they have a strong digital capability, where the global average is 38%.
Digital capabilities have appeared to be a more sought-after area among business as soon as they had to change work and communication modality in early 2020.
The PWC informed that 80% of the family businesses adapted to the challenges of the pandemic by allowing employees to work from home.
Globally, the family businesses describing themselves as digitally strong are third or fourth generation businesses and the next generations are playing an increased role in digital strengthening, indicating their hunger for changes and modernisation.
Also, Bangladeshi family businesses are clearly ahead of their global peers to induct the next generation of entrepreneurs into businesses.
One-third of the first generation family business owners in Bangladesh expects that the next generation would become the majority shareholder in five years. Besides, 57% of the family businesses here revealed engagement of their family members in the businesses, while the global average is 55%
Here, the next generation's involvement in boards and management is higher than the global average – 41% and 30% respectively. In terms of shareholding and being at the management position, it is almost similar around 30%.
But for an engagement at any different role, Bangladeshis seem to be reluctant as only 7% of next-generation members tend to work in positions other than directors or top-level executives, while the global average is 21%.
Some 38% of the family businesses worldwide see no next-generation members' involvement in business, while in Bangladesh, it is 24%.
Nearly one-third of Bangladeshi family businesses said they have a well-documented succession plan.
Here, like the rest of the world, protecting family assets through doing better business is the key goal, while the majority of family businesses lack well-defined business or family constitution.
In terms of governance, family-run companies are still lagging as only 63% firms have governance policy while the global average is 79%.
But they are planning for better adoption of corporate structure and practices, reflected through their plans for fewer owners' participation in management, less family control.
Now, 17% of the family businesses are led by external executives, which will grow to 41% in the next five years, according to the survey.
However, Bangladeshi family businesses are found to be prioritising sustainability less than their global counterparts, they are more focused on community supports while lagging in terms of environmental and other sustainability points, including stakeholders' wellbeing.
In the pandemic, Bangladeshi family businesses are ahead of their global peers to financially support their employees and community members, but in terms of staff retention, emotional and mental health support to staff, supporting suppliers and other stakeholders, they lagged behind the global average.
The PWC survey across 87 of the world's territories interviewed 54 of the Bangladeshi family business leaders and they informed that over the next two years - 2021 and 2022 - they will prioritise tasks like improving digital capabilities, expanding their businesses to new markets or client segments, introducing new products and services, increasing use of new technologies.
Covering costs, protecting the core business will also be on their priority list.