SMEs record decline in age of chief executives in four years – Business Daily
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The age of chief executives running small and medium enterprises (SMEs) has declined in four years, the annual Business Daily and KPMG Top 100 SMEs survey shows.
About 38 per cent of SMEs are run by CEOs aged under 40, an increase from 23 per cent in 2019.
Chief executives leading businesses with an annual turnover of less than Sh 5 million aged between 41-50 were reduced from 41 per cent to 25 per cent, while those between 51-60 increased to 27 per cent from 24 per cent.
Those above 60 years dropped to 10 per cent from 13 per cent in 2019, indicating high departures from the C-suite under the small businesses.
Out of these, businesses led and owned by women increased to 30 per cent from 12 per cent over four years, while 44 per cent are family-owned enterprises.
The fall in the age of leaders running SMEs followed a report by Nairobi Securities Exchange (NSE), Kenya Institute of Management and Kenya Private Sector Alliance released last year, which showed that the average age of boards in Kenya was 47.6 years as of March 2021, an improvement from 55.8 years in 2017.
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The report showed young executives aged below 35 accounted for only four per cent of boardroom seats against their older counterparts aged between 46-55, who at 57 per cent are the majority.
The Top 100 Survey — a joint initiative of Nation Media Group and audit firm KPMG East Africa — recognises the best 100 small businesses in Kenya.
The survey made a comeback this year after a two-year hiatus following disruptions caused by the Covid-19 pandemic. It focuses on evaluating small businesses’ resilience to the economic crisis. It surveyed 188 companies.
Winners of the award this year will be announced today in a gala dinner hosted by the Nation Media Group.
Firms were required to submit audited financial accounts for the period between 2018 and 2021 underlining the need for improved accountability and bookkeeping.
In addition to having a four-year average turnover of between Sh 50 million and Sh1 billion, the companies should not be listed on the NSE.
Banks, professional services firms such as law accounting and audit firms, SACCOs, and insurance companies are excluded from participation.
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From the report, the majority of the businesses reported a revenue turnover of between Sh 100 million-Sh 499 million over the four years, while consumer and retail, and technology sectors dominated at 15 per cent each.
Businesses representing 55 per cent were hit hard by the pandemic and are still feeling the pressure of the crisis.
About 14 per cent have since improved performance since the pandemic struck.
Depreciating currencies, declining profitability, and changes in regulation are ranked as the top three challenges that mid-sized companies face. Others include increased tax rates, declining turnover, increased cost of labour and political uncertainties.
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