Proper governance key to survival of family-run businesses, expert says

For Filipino family businesses struggling amid this pandemic, reaching that 100-year milestone is probably last on their list of priorities these days, considering that the country’s economy is barely surviving. However, according to a local family business advisor, now is the best time for such enterprises to start formulating their succession plans in order to ensure unity among their members, as well as empower and engage them—and that means focusing on the issue of governance.

“Most of the time, family-owned businesses neglect the concept of governance. For many, governance is a ‘side dish’ that is complicated and time-consuming,” says Eric Soriano, Asean family business advisor and executive director of Wong + Bernstein (W+B) Advisory Group. “Also, business owners and family members think they should go to where the action is, or to make money, to survive, and to keep the business afloat. But I totally disagree because it is critical now, more than ever, to become fixated on the concept of governance.”

According to Soriano, governance is all about the combination of these key factors: communication, family unity, clarity of roles and responsibility and accountability.

“When you talk, you can solve issues. When there’s unity, there’s harmony in decision-making. When you clarify roles, there should be less overlapping of specific [jobs], and there should be less friction. On top of that, there should be responsibility and accountability, and when you put all of those together, you have governance, and when you have that, then you have a resilient family business,” Soriano explains.

It’s this kind of resiliency that is critical in a crisis, he adds, because governance determines whether a family will come together or fall apart in such situation.

To further expound on the principles of family business governance, Soriano will be speaking on Aug. 29, Saturday, at the virtual conference titled “The Power of Succession Planning: Blueprinting A 100-Year-Old Journey,” hosted by the W+B Advisory Group.

Soriano will be joined by other speakers, such as Richard Eu of Eu Yan Sang International, who will talk about his experience in overcoming familial challenges as a successful fourth-generation successor, and leading a corporate giant that has lasted for over 141 years; Josh Baron, cofounder and partner at development consulting firm Banyan Global, who will discuss the secrets of attaining multigenerational success; and author and family business advisor Steve Legler, who will tackle the crucial role of a harmonious family in creating a strong and long-lasting legacy.

“The Power of Succession Planning: Blueprinting A 100-Year Old Journey” will be streamed via Zoom on Aug. 29, 10 a.m. Ticket price is at P3,800. For inquiries and reservations, call 0917-3247216/0921-3648824, or email inquiries@wbadvisoryasia.com. —Annelle Tayao-Juego