Family-owned businesses (FOBs) in South Africa, as in the rest of the world, are setting the benchmark for performance, resilience, and adaptability. Defined as companies in which founders or their descendants hold significant share capital or voting rights, FOBs have long played an outsize—and often underacknowledged—role in the global economy. With a knack for surviving and thriving over decades, FOBs account for more than 70 percent of global GDP and about 60 percent of global employment, and they play a critical role in supporting education, healthcare, and infrastructure development around the world.1 They also consistently outperform businesses that are not family-owned.
Recent McKinsey research compared the performance of 600 publicly listed FOBs with 600 listed non-FOBs between 2017 and 2022. The study found that, on average, FOBs delivered 17 percent higher ROIC, 14 percent higher TSR, and 33 percent higher economic profit, though the extent and drivers of this outperformance vary.2 Additionally, we interviewed leaders of more than 20 FOBs and surveyed another 600 primarily private FOBs worldwide, including in South Africa, to uncover what these businesses are doing differently and how they have created superior value over decades.
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