In the latest episode of Up to Speed with UBS, listen to Francesca Chan, a director from the Family Office at UBS, talk about how family businesses can ensure their legacy, why clear rules are key to maintaining harmony during succession, and how to nurture your future successor without causing a family rift
As the old adage goes: the first generation makes it, the second generation spends it, and the third generation blows it. But like so many jokes, is it funny because it’s true?
From navigating tricky family dynamics to knowing when to modernise, ensuring a lasting legacy for your family business can be as much of a challenge as building that company in the first place.
The family firm is a particularly prevalent form of ownership in Asia, accounting for 85 percent of businesses in the region. In fact, some of Asia’s biggest businesses are under family ownership (think: Samsung, Reliance Industries). This means there are significant wider economic ramifications to how well these companies are set up to last.
In contrast to the West, most Asian business dynasties are only in their second or third generations. This means that the next two decades will be the most delicate and crucial period in managing succession—the stage when the founder has died or given up control, but the family has yet to set up strong institutional structures.
So, what’s the biggest challenge a successor faces? When’s the right time to hand over the keys to the kingdom? And what are the key steps to building your own succession roadmap?
We asked these questions and more to Francesca Chan, a director from the Family Office at UBS, in the ninth episode of our podcast, Up to Speed with UBS. In conversation with Gen.T’s Lee Williamson, Chan shares why first and foremost you must align your family’s values, how a family office may help you achieve your goals, and why without a succession plan, you could risk losing everything.
Here are a few excerpts from the conversation. Click the audio player below to listen to the full episode.
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ON MAKING YOUR OWN SUCCESSION PLAN
“Define your family's values, purpose and vision is the first step. Second, develop a roadmap. Family situations and dynamics evolve over time, and so does the business environment. So the roadmap can act as a step by step guide with prioritised action items. And it can be fine tuned to adapt to the changing circumstances of the family. And last but not least, get professional help.”
ON MAINTAINING FAMILY STABILITY
“A succession plan is very crucial to maintaining stability and continuity in a family business. Because it's really not just about who will take the reins, but how.”
ON THE VALUE IN OPENING A FAMILY OFFICE
“Family offices can actually play a unique role in the family, because they not only help the family, professionalise the management of their investments, but they can also provide the families with a platform to communicate, as well as advisor skills and managing and growing the wealth for both current and future generations.”
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