[Singapore, 8 November 2013 (Friday)] – Singapore Management University’s (SMU) Business Family Institute (BFI) has partnered with Deloitte Southeast Asia in a pioneering research on the ‘Asian Business Families Succession – Going the Distance with the Next Generation’.  The comparative research survey conducted by BFI@SMU between August and October 2013, covered various countries in Asia, namely Singapore, Indonesia, Malaysia, Thailand, The Philippines and Vietnam.  The inaugural research survey, made possible by a research gift from Deloitte Southeast Asia, provides thought leadership on the current sentiments of business families on succession issues, as well as the strategies and structures related to Next Generation Training and Non-Family Advisors facilitating such business transitions.

Nearly ninety percent (89%) of the business families surveyed indicated that Business Family Management Succession is important to them and 81% of them believe that their Next Generation will be able to succeed and manage the family business.  There was also generational consensus that the next generation should take over management control of the family business in their 30s and 40s.

About half (46%) of the business families felt that they were in the developmental stage of the succession planning process, and on average, the findings indicate that a full cycle of a management succession process would take at least 25 years.

When asked about their medium term (three to five years) priorities, the business families surveyed highlighted: ‘Expanding into New Markets’ (80%), ‘Growing New Lines of Business’ (70%), and ‘Research and Development’ (61%).  ‘Mergers & Acquisitions’ features as a long term (five to ten years) priority for 51% of the business families surveyed.

To facilitate the pursuit of their business priorities as well as management succession, business families felt that they would benefit from training and development in three broad areas of Family, Investments and Succession covering specific subjects such as ‘Conflict and Communication’, ‘Family Governance’, ‘Family Leadership and Family Talent Development’, ‘Family Investments’, ‘Family Office’, ‘Trans-Generational Entrepreneurship’ and ‘Succession Planning’.

The research also found that ‘Trusted Non-Family Advisors’ have a significant role to play in facilitating the succession of family businesses.  Trusted Non-Family Advisors were viewed as a valuable resource to facilitate succession transition, for instance when there is a lack of internal family talent, to avoid potential family conflicts, to balance the needs of the business and the family, and also to effect change management for the business.

Most of the business families surveyed also felt that it would be beneficial to have Trusted Non-Family Advisors to mentor the Next Generation for critical roles in the business, to exercise objective judgment with minimal emotions, to facilitate succession, and to manage conflict.  In fact, a significant 77% of the business families surveyed indicated that they would be open to Non-Family Advisors facilitating succession.  Given the challenges of succession planning, business families felt that developing a clear succession plan that involves the Next Generation and Trusted Non-Family Advisors would facilitate the succession transition process.

“Compared to business families in the States and in Europe, family businesses in Asia are still in their infancy stages.  There are also limited research data and resources available in this part of the world.  The knowledge that we have been able to gather from this pioneering study is therefore going to be very valuable and insightful to Asian business families, and will facilitate openness and learning, knowing that they are not alone in wanting more developmental platforms to facilitate succession,” said Associate Professor Annie Koh, SMU’s Vice President, Business Development and External Relations, and Academic Director of BFI@SMU.

“In particular for BFI@SMU, the insights on their business priorities and the desired training for their Next Generation, as well as how they view the participatory role of trusted non-family advisors, are certainly affirmation that we are well-serving their needs of enhancing the quality and lifespan of their businesses,” she added.

“Deloitte has worked with many business families over the years whose vitality, stability and dynamism have contributed significantly to the business landscape of the region. At Deloitte, our work with these business families goes beyond providing audit and tax services; by understanding their concerns and aspirations, we endeavor to be trusted advisors to these business families,” said Mr Tam Chee Chong, Regional Managing Partner of Financial Advisory Services at Deloitte Southeast Asia.

“The findings of the survey highlight numerous areas where owners, management and family members can take note of in ensuring the efficacious success of business families and preservation of family wealth for future generations,” added Mr Tam.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.  Please see www.deloitte.com/sg/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries.  With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges.  Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.

About Business Families Institute @ SMU

SMU established the Business Families Institute (BFI@SMU) in August 2012 in response to the growing needs of business families in Asia.  Since 2010, SMU had recognised the emergence of Asian business families and discerned that they require specifically contextualised thought leadership and applied knowledge.

With this in mind, BFI@SMU hopes to collaborate with various partners, academic or otherwise, to be a knowledge leader in Asian business family-related education, engagement and research.  The Institute will address business family-specific issues such as family, ownership, business succession and governance.  The vision of BFI@SMU is to facilitate business families in Asia to develop, harness and leverage their family and financial capital across generations.  http://bfi.smu.edu.sg

Media Contacts

SMU
Huang Peiling
Senior Assistant Director, Corporate Communications
Email: plhuang [at] smu.edu.sg
Tel: (65) 6828 0964
Hp: (65) 9845 3361

Deloitte
Marie Li
Assistant Manager, Corporate Marketing & Communications
Email: meijli [at] deloitte.com
Tel: (65) 6224 8288
Hp: (65) 9847 3503