Majority of Family Businesses in Southeast Asia Say Succession Plans Make Winning Investment Easier

Leadership succession planning is a priority of family businesses in Southeast Asia because of its perceived importance in attracting investment, says a new report from the Economist Intelligence Unit.

The report, sponsored by Labuan International Business and Financial Centre, is based on a survey of executives in the region.

The survey finds that 67% of family businesses already have succession plans in place.

Two-thirds of survey respondents agree that customers and investors have more trust in a family-owned business with a succession plan than in a business that lacks one. Seventy-one percent of family business leaders say it is easier to attract investment with a succession plan in place.

Discussion to form succession plans often takes place in informal settings, such as family council meetings.

Despite the majority of family businesses saying they currently have a leadership succession plan, only around half of executives expect the ownership structure of their companies to remain the same in a decade compared to nearly three quarters in five years, the report says.

“Family businesses are the backbone of Southeast Asia’s economy," says Kevin Plumberg, the editor of the report. "It’s a sign of their maturity that they are making leadership succession planning a part of their long-term business strategies. However, they need to establish stronger formal governance structures to help ensure continuity beyond the next generation.”

Suggested Articles

Some of you might have already been aware of the news that Questex—with the aim to focus on event business—will shut down permanently all media brands in Asia…

Some advice for transitioning into an advisory role

Global risks are intensifying but the collective will to tackle them appears to be lacking. Check out this report for areas of concern