By: Prof. Enrique Soriano
“I think that succession is very important in a family business. First of all, the most important in a family corporation is that you have to build up rules and regulations for the family and the business. We have, for example, built a constitution. We have a family council. We have rules of engagement, who can join the family business because not every family member is entitled to work for the company. He has to try; he has to go through different processes.” – Jon Ramon Aboitiz, 4th Generation Successor, Aboitiz Group, Est. 1889
AS STRONG advocates for family unity in Asia, W+B’s sole objective in mounting the event was for family owning businesses, big and small, to learn from the best. After a series of brainstorming sessions, the organizing team unanimously handpicked newly appointed Alliance Global Inc. CEO and second generation successor Kevin Tan as my co resource speaker.
The events group had two objectives in mind, firstly, for the speakers to inspire next generation leaders to do what is right (Governance) and second, for visionaries to institutionalize the right structure before pursuing any leadership and ownership transition (Succession). Transition means family involvement and development over time starting with the entrepreneurial couple as the first stage of the business.
AGI is a US$15 Billion diversified holding company comprising several publicly listed companies under its portfolio. One of its core operating units is Megaworld Corporation, the biggest vertical developer, BPO landlord and township builder in the Philippines with more than 700 buildings constructed since its inception in 1989. The conglomerate, founded by Kevin’s father, Dr. Andrew Tan has more than 42,500 employees and Kevin’s mandate as the new CEO, is to take the different businesses to the next level.
In his speech, Kevin regaled the audience with his wealth of experience starting as an entry level employee to his rise in becoming a successor after logging almost 20 years of service. He also highlightedthe challenges of working under different professional mentors and his eventual promotion to senior management level not necessarily by virtue of his lineage but by constantly proving himself to his family, his non family professional colleagues and the business community.
He attributed his professional growth to his father’s vision and value system of integrity, innovation, hard work and he repeatedly emphasized on the importance of hiring professionals/non family executives. He went on to challenge business owners that the only way for growth to happen is to invest on talent. In a highly competitive global marketplace, talent is non-negotiable.
Finally, he concluded his talk by saying that only family members with the passion, commitment and the leadership credentials should be eligible for employment in the family business. He cited his case where there are 4 siblings and only 2 ended up joining the business. His equally talented brother Kendrick is the Executive Director of the global giant, Emperador Inc.
I am sharing the six (6) Successful Family Business Tips that Kevin articulated in his speech. These values are very important and must be embraced by every family member aspiring to continue the family business legacy for the next 100 years:
Respect Hierarchy and Seniority
Working in the Family Business is not a Birthright
Avoid Conflicts of Interest
Establish the Code of Corporate Governance
Thorough Planning before passing on the Torch
Find your purpose
I would like to take this opportunity to express my most deep felt gratitude for the overwhelming show of support of participants comprising visionaries and their families, Board of Directors and senior professionals who took time out of their busy schedules last Saturday and trooped to Manila Marriott Hotel to attend the Wong + Bernstein (W+B) Family Business Forum entitled “On Becoming a 100 Year old Family Business”, a major annual event meant to raise awareness on the importance of Governance and Succession in family owning businesses.
The event was a full house and tickets were sold out weeks before the event. To all those who were involved and worked incredibly hard over the last couple of months to make the event the best it could possibly be, I am thankful.
Prof. Enrique Soriano is a World Bank/IFC Governance Consultant and an International Family Business Coach, National Agora Awardee for Marketing Excellence, Book Author of two best-selling Business books and Executive Director of ASEAN-based Consulting group, W+B Strategic Advisory. He is also a Professor of Real Estate, former Chair of the Marketing Cluster at the ATENEO Graduate School of Business and a senior fellow at the IPMI Indonesia International Business School. He is an active member of the Singapore Institute of Directors (SID). You can read Prof Soriano’s business articles for free at www.Faminbusiness.com