Trusted advisers can bridge the gulf of communication between patriarchs and the next generation in Asia Pacific family businesses when creating much needed family constitutions.
Up and coming members of family businesses often struggled to be heard by traditional elders but consultants from finance, academia and law can help next-gens find their voices when challenging firmly held views.
These comments were among several suggestions for families and advisers in the new white paper by Campden Research, in association with Credit Suisse, titled A Roadmap for Generational Wealth in Asia – Family Constitutions: Early Lessons Learnt, published this week.
Almost 1,280 listed companies above $500 million in market capitalisation in Asia, excluding Japan and Australia, are family influenced and the proportion is even higher in unlisted or privately held companies, the report said.
However, relatively few ultra-high net worth (UHNW) families in Asia Pacific have adopted written documents, to guide future decision making by the families, due to the newness of family businesses and wealth.
Family governance progress is hampered in the region of India, China, Hong Kong, Singapore, Thailand and South Korea by patriarchal control, a lack of knowledge about family governance and language gaps between generations.
The shortcomings of some family constitutions that have been made were also noted. Attitudes to women and in-laws needed to be revisited.
“Usage of constitutions is expected to accelerate going forward in Asia Pacific due to increasing wealth and familial complexity, pressure from the next generation and the threat of litigation,” the paper said.
The new World Wealth Report by Capgemini found the UHNW outlook to 2025 was bright for Asia-Pacific, where the region's prosperity was on course to raise world wealth to $100 trillion.
For the fourth paper in the Roadmap series, the Campden Research team interviewed prominent members of UHNW families in Asia Pacific plus advisers from large family offices, academia, consulting and law in the first half of 2016.