Yuelin T Yang is director of finance and corporate affairs, IMC Group.
Asia-Pacific is a diverse region that includes Australia, China and India at its fringes, and Singapore, Thailand, and Indonesia at its core. In common with Europe, the prevalence of family businesses in the region is 60–80%. We are currently introducing the idea of a family business association and are planning to launch an Asia-Pacific FBN chapter at September's Annual Family Business Summit in Berlin.
Many of the region's family businesses are young (having started after WWII) and are now passing to the second generation. Even in China, which opened up in the 1980s, first-generation entrepreneurs are starting to think about succession. Interestingly, many of the next generation have been educated in the West and are asking if they have to join the family business and, if they do, if they need outside experience.
Before the Asian financial crisis of 1997 the economy was booming and there was an attitude of "If it ain't broke, why fix it?" After the crisis, many family businesses got a bad reputation due to a lack of transparency and weak corporate governance, and it took a few years for firms to bounce back. Current economic conditions coupled with the challenges of sustaining a family business in this era of globalisation means the timing to bring business families together is perfect.
We have three main objectives: to share experiences in a confidential environment; to demonstrate the research being done on family business by INSEAD and similar institutions; to highlight next generation issues that are currently so key.
To succeed in the region you need to master the personal touch, while the Confucian culture that is embedded in so many of our countries means trust is a concept that is particularly vital to the region's families. We are hopeful that people will feel happy to share their experiences on a wide variety of issues and, as the critical mass in each country grows, we hope to develop individual country chapters.
The region's family businesses need to evolve more, professionalise and trust outsiders. Many of these issues come about because the founder is still in control or present. With globalisation, the traditional conglomerate model is not going to work so family businesses must find the right niches and be nimble. Through mutual dialogue with other business families, we hope to share best practice, improve governance and discuss the best ways to evolve existing business models.
All these issues make setting up a FBN chapter very challenging. Initially the chapter is in Singapore which is pretty central to the region as a whole, and is nicely situated between the two engines of India and China. The Singaporean government is very supportive of the private sector and the private wealth management sector in particular is making a big push. A lot of wealth is coming into the country and European banks are increasing their operations here.
The Asia-Pacific Families in Business Conference will be a further chance for families to increase their knowledge of relevant issues. Discussions on corporate governance issues will aim to answer questions such as how to handle being the majority shareholder when you are a listed company. Family governance issues are also becoming more important. As many family businesses are currently first- and second-generation, there are relatively few family members involved. But it is important to learn how to manage a company while giving increasingly numerous family members a role.