First generation family businesses in Asia unprepared for impending succession

SMU and Deloitte published a report titled “Asian Business Families Governance: Cross the Chasm for Inter-Generational Change”, which found that 83 per cent of Asian families do not have concrete succession plans even though 85 per cent expect to pass on their businesses in five years or less. SMU Vice President for Business Development and Professor for Finance (Practice) Annie Koh said: “While 68 per cent of the families have not experienced a leadership transition, 31 per cent have shortlisted potential successors: however, their succession processes are neither regularly reviewed nor updated by a board.” The study suggested reinvesting profits, engaging the next generation, and planning for succession early in order to ensure the longevity of Asian family businesses.