Signage appears on the Australian head office building of PricewaterhouseCoopers in Sydney, Monday, June 26, 2023. (AP Photo/Rick Rycroft)
Family-run businesses in the Philippines are in the midst of a transition, with the reins of power being passed on to the younger generation at a time of great challenges.
According to the 2024 Philippine CEO Survey conducted by professional services firm PricewaterhouseCoopers (PwC) and the Management Association of the Philippines, the next few years will be “critical” for most family-run companies as the transfer of power is happening “when the world is continuously challenged by healthcare crises, rapid technological changes, climate change, and geopolitical issues.”
READ: Outsiders inside: The secret weapon of successful family businesses
The joint annual study was based on the responses of 168 chief executive officers surveyed from July to August this year.
Two of every five CEOs who took part in the survey came from family businesses, with the majority currently led by the first and second generations.
Most qualified
Sought for comment, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael Ricafort told the Inquirer that effective succession planning would be key to the continuing success of family-run firms.
“Controlling shareholders would still have a say in the designation of CEOs, including family businesses, though the preferred approach is choosing the most qualified, from family members or professional nonfamily members,” Ricafort said, citing this practice as a part of good corporate governance and global best practices.
The report also said that for both family and nonfamily organizations, proper systems and structures should be in place to ensure that their businesses can withstand another pandemic, as well as global and domestic economic crises.
“If there’s anything positive that came out of the COVID-19 pandemic, it’s that business leaders became smarter, wiser, and more humble,” the report read.
“Through the pandemic, business leaders learned to make quick decisions without sacrificing their long- term goals, manage their assets efficiently, adapt to technology, and maximize and invest in human capital,” it added.
Breaker
Meanwhile, geopolitical uncertainties are the top concern of Philippine CEOs in the next 12 months, with 62 percent of the respondents saying these keep them awake at night.
The Russia-Ukraine conflict, the war between Israel and the Hamas group, as well as the tensions from the territorial disputes in the South China Sea were among the concerns raised.
Other threats include macroeconomic volatility, inflation, and cyber security risks.
Still, 86 percent of the surveyed CEOs said they are confident about their industry’s prospects in the same time frame, reflecting a high sense of optimism despite the numerous challenges. INQ