Tag Archives: Family Business Coach

Hope Alone Will Never Heal Family Conflicts

oct 16

Lotte: Family Feud

Founded in 1948 in Tokyo by Shin Kyuk-ho, the Lotte Group started off as a chewing gum distributor to children in post-war Japan. Nearly a decade later, Shin expanded the company to South Korea and became the country’s largest confectionery manufacturer. Lotte group engages in several industries, such as shopping, entertainment, finance, hotels, and food.

The feud began on July 27 2015 when the 92-year-old Shin dismissed his younger son Shin Dong-bin, the chairman of Lotte Group, along with six board directors. According to the Korea Herald, Lotte Group lost billions of dollars from its operations in China over the past four years, and Dong-bin had reportedly failed to report the losses to his father. Dong-bin held an emergency board meeting and staged a coup to remove his father as general chairman of the company’s holdings. The younger son kept both of his executive titles. The move angered Shin Dong-joo, who called his father’s demotion unlawful. In January 2015, Dong-joo himself was fired after his father discovered that he had overstepped his role by meddling in the management of Korean operations.

Lotte chairman clinches ultimate victory against brother

The long-running family feud between Lotte Group Chairman Shin Dong-bin and his older brother Dong-joo has apparently ended after the latter disposed of a large stake in the group’s key affiliate. The nation’s fifth-largest conglomerate said Thursday that former Tokyo-based Lotte Holdings Vice Chairman Shin Dong-joo sold a 6.88 percent stake in Lotte Shopping ― 1.73 million shares ― through a block deal for 391 billion won ($342 million).

Group founder Shin Kyuk-ho’s oldest son now holds just 7.95 percent of Lotte Shopping, while his younger brother has 13.46 percent.

The siblings have been fighting for control of the retail giant since July 2015, engaging in a fierce legal battle. But the older brother appears to have accepted defeat in the uphill battle for now, according to industry watchers.

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NEW YORK. NY. On September 3, 2008, at the Republican National convention, former New York City Mayor Rudy Giuliani was the first to use the phrase “hope is not a strategy. Specifically, his convention speech included these words:

“Because ‘change’ is not a destination, just as ‘hope’ is not a strategy.

What Does It Mean? When Mr. Giuliani used the quote in late 2008, he was saying that Obama – and any other president – needs to act.

I am connecting this message to family members who are suffering in silence because of deep conflict within the family and indecision.

Hope Supported by Action

You cannot just hope and wished that the issues will just go away. As a family member, you need to muster enough strength to initiate and act on the problems that are causing tension within the family and have likely spread to the business.

The patriarch/matriarch must act to mitigate the problems. Just sitting around thinking about how the current situation could be better is not going to change anything.

The fact remains that the following problems will never be resolved by just merely hoping for the best:

  • Hope will never address the confusion as to where the business is heading
  • Hope will not reduce misunderstandings among siblings/cousins
  • Hope will never resolve personality differences
  • Hope will not cure the incompetence nor can it terminate unqualified/ dishonest family members
  • Hope can never manage frequent power struggles among siblings/cousins
  • Hope will not create ownership alignments/agreements
  • Hope will not mend emotional outbursts and constant finger pointing and cursing
  • Hope can never cure greed nor will it fix a slew of conflict of interest or self-dealing activities by family members
  • Hope will not remove from the business entrenched inept but entitled in-laws
  • Hope cannot heal a scarred relationship
  • Hope can never promise nor offer solutions to a mismanaged enterprise nor will it help correct a bad P&L (Profit and Loss) financial statement
  • Hope cannot prevent a family member from selling his or her shares to a competitor
  • Hope cannot prevent a catastrophic failure of both the family and the business

Just hoping is plain and simple procrastination!

I can list more issues but one thing is crystal clear, hope is not a strategy. Without any means to address these deep and frightful issues, it will be a bruising struggle for power that will result into more disputes, further antagonizing members and weakening the very foundation of the family business.

If there is continued inaction, these problems can cause entropy and will scar the family and the business forever. The consequences of inaction are irreversible.

Objective Intervention Is Important

The best and only option is for family members agreeing on solutions and subsequently formulating family agreements. To avoid making the issues less personal and ensure greater objectivity, it is imperative for the family to engage the services of a third party facilitator who will propose initiatives leading to the creation of mutually agreed governance policies defining the roles and responsibilities of family members active and not actively working in the business.

The good news is that most family related problems are predictable and initiating policies before they happen or morph can eliminate or reduce further tension and will de-escalate a brewing conflict when the founder or patriarch is no longer around.

Do not get me wrong, hope and prayer can work in the face of a difficult situation, but family members need to act and do their part now. There is still time.

(esoriano@wongadvisory.com)

*****

LINK:

http://kore.am/a-breakdown-of-the-lotte-family-feud/
http://www.koreatimes.co.kr/www/tech/2017/02/694_224573.html
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Why Banks Love Governance

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Corporate Governance

Outstanding Performance, Higher Profits, Expanded Market Reach and the like FAILS to protect a company which has put good governance & ethics at the back burner.

Only the culture of strict adherence to good compliance can keep a company ahead on sustainable basis, bring in larger profits.

Corporates should act like honey bee which suck the nectar of the flower without effecting its fragrance and produce honey for the well –being of society.

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SAN FRANCISCO, CA. Governance is everywhere. I am slated to deliver a talk related to Ownership and Succession today to the students, faculty members and business owners at the Community College of San Francisco Ocean Campus (CCSF).

This will be another interesting exchange of ideas with business owners and the academia similar to the one I did exactly a year ago when the University of San Francisco College of Business (USF) core faculty invited me to lecture on a topic as diverse as the ASEAN Integration and Its impact on the US Economy.

Next month, I will resume my family business initiatives in Africa organized by the World Bank/IFC Group and then proceed to Southwest Asia to run another governance campaign in collaboration with the country’s stock exchange.

If I get “unlucky”, I will end up doing another North American engagement before or after the year ends. It will be winter so advisory work can get really challenging.

Just as I thought my business coaching engagements will taper off as the year is almost at the tail end, in comes invitations to actively promote governance and succession in emerging economies like Kenya, Ethiopia, Rwanda in Africa and India, Sri Lanka and Bangladesh in South Asia.

Governance is a Top Lending Metric

There is no doubt that creditors, lenders, VC’s and financial institutions are clearly biased towards businesses that are devoted to best practices or whose business and operating model revolve around corporate governance.

The Asian and Global financial crisis in 1997 and 2008 revealed severe shortcomings in corporate governance. Quoting an OECD report, “when most needed, existing standards failed to provide the checks and balances that companies need in order to cultivate sound business practices.”

Right after the 2008 debacle, the OECD and several global institutions launched an ambitious action plan to develop a set of recommendations for improvements in priority areas such as remuneration, risk management, board practices and the exercise of shareholder rights.

The changes happening now is a result of the global wave of governance standards put in place especially in the most vulnerable sector, the start-up businesses and family-owned enterprises.

Hopefully, the collaborative and active intervention efforts will encourage founders of businesses to step up to the plate not just in their profit strategies but in establishing a structure where sound business practices can become the norm.

It is a fact that one of the major hurdles for business owners is the issue of transitioning from an owner mindset (where there is weak governance structures and systems) to the new model of stewardship management (where governance is written and there is compliance of best practices).

Why Creditors/Banks Prefer Businesses that Espouse Governance?

The answers point to a very important ingredient in lending money… the ability to use the fund for the right purpose and the responsibility to pay the creditor-bank on time.

Corporate governance structure builds a strong family foundation and banks are naturally receptive in lending capital to a stable enterprise especially if they see a family constitution in place that captures the following:

  • Vision-driven and values-based that prepares the family and the business for the future
  • Aligning the family’s relationship with the business by way of meritocracy
  • Defining the family member’s rights and responsibilities
  • Ownership alignment covering the next gen leaders are well-documented
  • Effective plan for ownership including key family leadership role and succession
  • A Communication platform to minimize conflict and misunderstanding for active and non-active owners
  • The creation of Family Council to manage Family and personal issues

(esoriano@wongadvisory.com)

*****

https://www.slideshare.net/pkvijay/corporate-governance-39555679

 

Why Am I Passionately Espousing Family Governance?

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Samsung

Samsung Electronics, the crown jewel of the Samsung group, has reported record profits despite Lee’s arrest in February and a damaging recall for Galaxy Note 7 phones that were prone to battery fires. The financial success was largely thanks to events set in motion by Lee’s father in the 1990s. The elder Lee made the decision to break into the memory chip industry and followed up with massive and risky investments that rivals could not match every year.

Those investments are paying off. Samsung, the world’s largest maker of memory chips for servers, mobile devices and computers, was the biggest beneficiary of supply constraints and explosive demand for mobile devices that pushed up prices.

Longer term, however, some analysts see risks for Samsung and its flagship Samsung Electronics.

“South Korea’s chaebol system is similar to monarchy,” said Park, the Seoul National University professor. “In the monarchy system, you need a king.”

There is also potential for a destabilizing family feud over inheritance when the elder Lee dies.

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Over the past seven years, our firm, W+B Family Business advisory has been spearheading family and business governance in Asia.

Most of our alliance partners in the business sector and the academe in North America, Indonesia and Singapore have referred to our vigorous campaign as “relentless”.

In our head office, we modestly refer to our work as the “W+B Method”.  International clients have acknowledged our method as best in class and we solely look at it as our compelling value proposition.

Why is W+B vigorously campaigning to promote Governance?

It is a race against time. We have witnessed first-hand, emotionally charged families being torn apart because of rivalry, greed, envy, vengeance and sometimes senseless loss of human lives.

There have been quite a number of cases where family members would “kidnap” a parent allegedly suffering from dementia in order to prevent an asset sale or overthrow a sibling in power or seeing siblings conspire in forging documents so they can surreptitiously sell assets.

I have experienced several cases where I had to enforced disciplinary action and initiate expulsion of family members engaged in self-dealing, conflict of interest transactions and in rare cases absconding with large amounts of money.

These are unfortunate but live cases of family conflict! When the battle lines are drawn, you can expect discord among family members, sometimes violent confrontations, parents inconsolable and confused, and the business on the brink of a major setback or at worse, imploding.

Without any doubt, as Family business advisors, we have the herculean responsibility to intervene and affect the governance process because it is the way forward and the right thing to do.

To quote a Bloomberg report related to the never-ending family drama unfolding at Samsung:

“Sabotage, espionage, succession battles, and sibling rivalries — it sounds like a season of “Game of Thrones.” But it’s the real-life drama of the Lee family, the Korean dynasty that founded Samsung with wealth equal to 17% of the country’s GDP.

It’s a fragile situation. If successor Lee Jae doesn’t navigate this right, there are family members waiting to take his spot.“

Currently, Lee Jae is in jail and family members and non-family shareholders are allegedly plotting separately to let him stay in jail for good.

Governance Intervention Must Be Holistic

Our coaching interventions are straightforward. As a Senior Advisor, my role is to articulate very important and purposive set of ideas and beliefs before any actual engagement. The key is to educate and prepare members for the journey toward corporate governance.

Educating family members is critical. The willingness and readiness of every family member to go through the process is equally vital.

Finally, the advisor’s role is to underscore the importance of embracing pre-work rules before starting the process of change. These are the following:

a. Governance and Succession is non-negotiable.

b.Size of the business is immaterial.

c.The bigger the number of family members, the more complex it can become.

d.Intervention should be on the 3 circles (Family, Business and Ownership). Each circle has its own unique characteristics so a tailor-fitted approach must be in place.

e.Procrastination is like a thief of time. Delaying governance further can increase the volatility of the family and the business.

f.Age is a factor. As the founder and the business leader ages, succession and related issues in a multi generational family can offer more challenges.

g.Compliance of the rules and activation of the Governance Councils as enshrined in the constitution is non-negotiable.

(esoriano@wongadvisory.com)

*****

http://www.chicagotribune.com/business/ct-samsung-prison-qa-20170825-story.html

 

Padre Noble, Hijo Rico, Nieto Pobre

Sept 25

Governance

As the family and business grow and become more complex, the need for effective governance structures increases. A well structured governance system promotes harmony within the family and business, improves communication and promotes accountability.

Governance defines a process and structure for decision making within each of the systems involved in a family business – family, business, ownership.

Essentially, governance encourages the right people to have the right conversations at the right time.

Effective governance is critical to the long-term success of any organization. This is especially true for family run businesses where the complex dynamics that accompany overlapping family, business and ownership interests can often create conflict where none need exist.

 

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“Father Founder of the company, Son Rich, and Grandson Poor” is Mexico’s powerful equivalent to Asia’s popular saying about family-owned businesses, “Wealth Shall Not Last Three Generations”!

Citing an article penned by Lee Iwan, a leading Business Strategist in Mexico, he avers that the “founder works and builds a business, the son takes over and is poorly prepared to manage and make it grow but enjoys the wealth, and the grandson inherits a dead business and pronto an empty bank account.”

Family Governance Is Non Negotiable

I always reiterate that the first step towards governance is for family members to be cognizant of the major causes of the tension. Second, after identifying the source, the family with the assistance of a family business advisor, proactively work to ensure that adequate measures are adopted so that those conflicts do not spillover to the other circles (John Davis et. al. Three Circle Model). Lastly, if there are differences, they must not be avoided. This will only postpone the issue and create bigger problems in the future.

I strongly encourage the patriarch/matriarch not to waste time in pursuing the governance process. Your action now can help your grandchildren avert not just going back to being part of the “poorhouse” but the ignominy of causing the demise of the family business during their watch.

But to be truthful and fair about the wealth dissipation issue as to which generation caused the demise of the business? The blame lies on the failure or inaction of the first and second generation to initiate governance and succession early.

Tension is Normal in a Transition

When governance is initiated, natural tensions occur as they cannot be avoided. In fact, if there is no tension, it can mean that family members are passive, incompetent, either not thinking or trying to improve or have no power to assert. All of which are equally red flags that a family business will not last.

With any multi-generational transition, you can anticipate tension. With more family members, you can expect more complex family issues emerging that will further exacerbate and breed more tension.

It is important that Family Business governance be set in motion, where rules and expectations are articulated and compliance integrated in the family ecosystem.

It is equally important to note that “every single-owner enterprise passed through various stages of transition and the process improvement is dispersed over time”. But when issues that cause strain and conflict remain unsolved during the governance initiatives, you can expect many of these challenges to manifest and re-appear when the second and subsequent generations enter the business.

The 3 Components of Family Governance

In a Harvard Business Review article with the same title penned by noted Family Business Professor, Dr. John Davies, he adeptly highlights 3 components of Family Governance:

a. Periodic assemblies of the family

b. Family council meetings for those families that benefit from a representative group of their members doing planning, creating policies, and strengthening business-family communication and bond.

c. A family constitution—the family’s policies and guiding vision and values that regulate members’ relationship with the business.

He further points out that for governance to be effective, there should be a working family assembly and family council that focuses on the roles and responsibilities of family members. He outlines the critical areas:

  • These are clarity on family member roles and rights.
  • Actions of Family members, family employees, and family owners to act responsibly toward the business and the family.
  • Regulate appropriate family and owner inclusion in business discussions.

 

(esoriano@wongadvisory.com)

*****

http://www.mcgowangroupinc.com/services/governance/

The destructive effect of poor succession planning (Part 2)

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Ensuring the solvency of a family business

Note that succession planning is not about just sending the second and third generation to the top schools. It’s about careful career planning and skill development, and more importantly, it is about making sure that the core processes in the company, including governance, communications and decision making, are such that they support succession planning. Key areas that often are in the center of this are intra-company communication routines, decision-making processes, documentation, and sharing of information.

Corporate governance, growing pains, and your family business 

Instilling corporate governance into the business model is more of a mandatory thing, rather than just a benefit. Without proper governance, a company (be it family-owned or not), can simply not survive.

The growing pains are that usually switching from the first generation “entrepreneurial” style to proper professional grade succession planning requires a major change in mindset.  Sometimes this is only possible in conjunction with the actual generation shift. However, it is much better if succession planning and governance are already addressed within the time of the first generation. This way the process is smoother and has a better likelihood of success, success including also preserving good relationships across the family members throughout the process.

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While some initiatives in my previous article including the list below are instinctively noble, Family Business author Dr. Fan refers to these leader aspirations as “wishful thinking”.

a. Family gene pool is limited but Patriarch is not keen on hiring Non Family professionals

b. Typical of founders, they would express their desire to retire but the patriarchal shadow continues to cloud the next generation members’ decision-making

c. They apportion their wealth equally resulting to a divisive and disunited next generation shareholder group where decisions are stalled

d. Patriarch will delay succession plans because of the fear of losing control

In most cases, family members who have been sheltered often want to sell the business and move on right after the death of the patriarch or matriarch.

Similarly, some leaders (especially the conservative owners) even pass away without making a will. This leads to bitter feuds and will be even more complicated and severe if the founder has several wives.

Flying Away from the Nest

Finally, with the patriarch gone, the untrained and entitled next generation members will end up clashing amongst themselves.

Limited decision making and the lack of any form of hardship experience while growing up under the shadows of their overprotective parents will take its toll on the business.

With their roles undefined for years, there is the likelihood that heirs will be confused amplified by an unproven management skills set.

Compounding the lack of preparation is when they discover that the business has liabilities (debt load) and a looming creditor intervention to exact pressure on the new leadership.

With all the problems besetting the enterprise, the natural option for heirs will be to opt out by selling their shares, effectively absolving them of any form of “hard work”. In the end, the preference to just “live the good life”becomes insatiable.

Can the bleak situation still be reversed?

This scenario is repeated many times, thus it is no secret that business owners go through many sleepless nights blaming themselves for creating entitled children.

I consider this pervasive problem one of the biggest dangers faced by family businesses in Asia where owners attempt to self-medicate by way of offering more perks to family members hoping to motivate them. The problem is in the manner the perks are equally distributed whether to the deserving, capable or inept. The other problem is whether the perks should be given in the first place.

This practice will certainly guarantee failure after failure as the incentive will translate to more entitlement for the next generation of untrained family members.

It now becomes a vicious cycle of generational tension and sibling rivalries. In the end, the business owner will end up struggling with governance, leadership transitions, ownership conflicts and even survival.

At this juncture when the patriarch or matriarch, by reason of age, rushes the process of turning over the business to the next generation and discovers their ineffective or feeble judgements, the parent will end up extending his reign until he succumbs to pressure, old age, stress and death.

There is Still Time to Exact Good Governance

It is absolutely impossible for family businesses to manage internal talent (both family and non-family) and or attract the best non-family professionals without setting up a governance best practices program.

The key is to separate the family and the business and ensure independent oversight from a professional board.

To be continued…

(esoriano@wongadvisory.com)

*****

LINK:

https://www.entrepreneur.com/article/254614

 

The Destructive Effect of Poor Succession Planning

sept 11

Yu Pang-lin

A property mogul has decided to donate his entire £1.2 billion pound fortune to charity, leaving his wife and kids with nothing.

He had a special interest in helping those with cataracts in their eyes. Since 2003, his foundation has helped restore the sight of more than 300,000 people from more than 20 provinces and autonomous regions across China, including some poverty-stricken areas in Qinghai, Gansu, Yunnan and Guizhou provinces.

Yu attributed his desire to help others with his experiences as a young man. In the 1940s, Yu had worked as a journalist and an editor for a newspaper, learning about the hardships of people in poverty. He moved to Hong Kong in 1958, and made a living in the early years with many jobs, including as a cleaner, handyman and construction worker. He later founded his own real estate company, then expanded to other areas, including tourism, hotels and healthcare.

In the 1980s, Yu started donating money to build schools, emergency centres, public bus routes, tunnels, fountains and other infrastructure projects. In 2007, he was on the list of world’s top philanthropists selected by Time magazine.

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“If my children are more capable than me, it’s not necessary to leave a lot of money to them. If they are incompetent, a lot of money will only be harmful to them,”

Hong Kong Real Estate Billionaire Yu Pang-lin

Yu is the founder of the Yu Pang-lin Foundation dedicated to healthcare, education and disaster relief. He was believed to be China’s first billionaire to donate an entire fortune to charity.

Alarming Number of Family Business Failures

In my work as Family Business coach doing the rounds in Asia the past five years, I have witnessed a rapid increase of family business disputes bitterly adjudicated in courtrooms because of poor governance and harmful wealth and ownership distribution.

In a Family Enterprise Trend report by my consulting firm, W+B Family Advisory, it researched on the average age of business owners who are going through “rush” transitions.

The study showed more than half were 70 years old or more. The firm also identified the top five major sources of dispute:

1. Money as a result of ownership misalignment and wealth distribution

2. Control and Power struggle among siblings and or cousins

3. Poor succession programs that bred conflict

4. Wrong policies related compensation, dividend policies and incentive programs

5. Employment for everyone. Despite their lack of experience and competence, family members are thrust into leadership positions because of their surnames

Summarizing the report and analyzing why conflict and tension happens among these enterprises, it highlighted the following findings:

“Business owners in general procrastinated and did not see the urgency of initiating governance in the early stages of the business cycle. They were just too busy growing the business.

In the latter stages when health issues surface often and disagreements were becoming frequent, owners would suddenly realize that the children were not prepared to assume full control of the business when they (parents) are no longer around. In short, there was a very high probability that these family enterprises were headed to separation due to internal squabbles.”

Litigation Can Scar Family Relationshipsfor Life

My role as governance coach is to prevent and deter senseless and unnecessary family tension from escalating into a full blown and irreversible family feud. That if left to feed on its own, will spill over and convert the courtroom into the next family battleground.

With the exception of lawyers from both sides, nobody wins in a messy litigation process. They are just plain expensive, personal and can scar relationships for life.

Inevitably, whatever comes out of any court case can produce a debilitating effect not just on warring family members but also on the financial state of the enterprise.

Why is conflict pervasive?

As the business leader or visionary gets old, he or she has to naturally pass on the business to the heirs. Unfortunately, many of these owner managers follow certain traditions to a fault.

a. They do not want to see their own business empire falling apart as a result of division of wealth

b. They want their children to stay together in harmony so they can continue the business

c. They have very strong preference towards their male offspring to carry the mandate in the next generational cycle

d. But they are not open to Non family professionals joining the business

e. There are no entry and exit rules for family members and in-laws

To be continued…

(esoriano@wongadvisory.com)

 

Family Businesses Must Aspire to Reach 100 years (Part 1)

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Ayala Corporation

Ayala Corporation is the holding company of one of the oldest and largest business groups in the Philippines. Ayala has leadership positions in real estate, financial services, telecommunications, water infrastructure, electronics manufacturing, automotive distributorship and dealership, and business process outsourcing, and new investments in power generation, transport infrastructure, and education.

Year started: 1834

Number of Employees: 35,073

Annual Sales: $4,194.97M (2016)

Net Income: $547.74M (2016)

In a disclosure to the Philippine Stock Exchange (PSE) on Friday, August 11, AC reported a net income of P15.1 billion for January to June this year, compared to the P13.8 billion in the same period in 2016.

“A journey of a thousand li starts beneath one’s feet” is a common saying that originated from a famous Chinese proverb. The “starts beneath one’s feet” in family business parlance is governance. And governance is all about rules, policies, systems and accountability. In short governance is all about institutionalizing control and decision making.  As the 8th Generation successor, Jaime Augusto Zobel de Ayala, Chair of Ayala Corporation puts it…

“It is important to teach each new generation, early on, the difference between ownership and stewardship. Ownership is a right of possession. Stewardship is a fiduciary role. It is holding the institution in ‘trust for’ the next generation. We feel, as a family, that this institution has been passed on to us for our care and not for us to dissipate or do what we will with it for our personal gain.”

Ayala Corporation (AC) was founded in 1834 and is the oldest family business in the Philippines. That makes AC 183 years old.

Governance is uppermost in everybody’s mind today. But governance can be a difficult and extremely challenging act for family business owners.

According to a PWC report, “no matter what their size, the unique—and often volatile—mix of personal family dynamics, business strategy and ownership criteria can create an emotionally charged environment that makes decision-making, not to mention day-to-day management, challenging. And as the founding generation ages, succession and power issues across an expanding family can create cascading concerns.”

In my previous articles, I narrated a number of highly successful Family enterprises in Asia and researched on their history as well as their transformation as Asia’s gold standard in governance and succession. Without any doubt, these companies exhibited remarkable parallelism worth sharing over and over again.

What made these businesses tick? What were the qualities of the leaders that made them endure family tension, betrayal, adversity and conflict? Was it pure luck that they overcame a bitter feud? What was their secret to longevity?

It is a fact that all family businesses struggle with governance and succession with some even facing untold hardship and survival. Take the case of the Eu Yan Sang Family Business that was established in the late 1870’s.

Before the fourth-generation Eu family members engineered a buyout what was originally their family business, the family had to endure a tumultuous period starting with the murder of the wife of the successor by her in laws in the second-generation, an escalating conflict in the third generation with 13 uncles fighting for the spoils of the businesses and a volatile fourth generation involving 72 cousins.

If not for the daring move of the fourth-generation cousins led by investment banker Richard Eu, who engineered a buyout, Eu Yan Sang would have ended in their generation. With rules in place, Eu Yan Sang is now managed by a combination of fourth-generation descendants and professional managers and the growth has been phenomenal.

It is also noteworthy to consider some high-profile families in Asia that got embroiled in senseless and unnecessary conflict. For many, they ended in failure. For some, they were able to overcome the bitter rivalry and went on to strengthen their organizations.  I have compiled a handful of cases involving conflicts so owners, who are currently feeling the tension pervading within the family and the business, will realize the need to seek immediate intervention from family experts.

a. Mayfull Foods Corporation of Taiwan by far is the most violent and tragic family conflict recorded in Taiwan and probably in Asia. Gunshots rang out after a regular corporate meeting where the topic of inheritance was being discussed. Six brothers of the late tycoon Huang Jung-tu were present. The shooting resulted in the death of the two brothers. When the police arrived, the gunman ended up killing himself before falling from the 7th floor of their company’s headquarters. In one fell swoop, three brothers ended up dead in what police investigators called a pre meditated murder-suicide.

To be continued…

(esoriano@wongadvisory.com)