Markets
Family-owned biz under scrutiny
Cheah Chor Sooi | 04 Aug 2017 00:30
The time has come for investors in listed family-owned businesses (FOBs) to voice their discontent should they feel that archaic management culture has taken a toll on the companies’ profit margin or share price.

Otherwise, it will be an arduous task to break ingrained beliefs even as the better educated second or third generations are more receptive to power sharing and control, according to Wee Hock Kee, managing partner of CG Board Asia Pacific, a provider of learning and leadership development in governance, risk management and internal control.

“Institutional shareholders should exercise powers to raise questions if there are many family members in senior management or on the board [signs of excess baggage], and especially so when financial performance has been lacklustre or below industry benchmarks,” he tells FocusM.

Although meritocracy in terms of hiring the right talent is desirable, Wee says that it is still sensible to have family members within a large and well-qualified management team so long as there are sufficient core competencies to run the business well while minimising conflict of interest.

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