Family businesses and empires contribute an estimated 70-90% of global GDP and make up a significant chunk of listed companies on vibrant bourses worldwide. Business Today looks at the relationship between private control and public trading and the challenges unique to these businesses
Listed family businesses think in quarter-centuries, not in quarters, according to Elizabeth Bagger, Executive Director of the Institute for Family Business.
Such statements become more remarkable when statistics show that two out of every three businesses will last an average of two years while half of the companies last an average of five years.
Firms that are family-controlled or founded on family ownership are a commonplace sight of the business landscape; in the US they account for 80% of all firms while in Singapore they make up 60% of listed corporations on the bourse. 40% of the largest companies in France and Germany are family firms.
Family businesses are an often-overlooked but very prevalent form of ownership; from the mom and pop store to the ubiquitous, larger-than-life names such as Samsung, Walmart, Facebook and Volkswagen.
Building an empire from the ground up requires tenacity, but zooming in to the issue of outsiders buying into a family business begs the question of the relationship between keeping it in the family (founders are known to be anxious over loss of family control when diluting family ownership) or inviting some necessary degree of public ownership in order to thrive.
When considering this in the Asian context, think first of Malaysian business magnate Robert Kuok, having begun as a commodities trader seven decades ago, whose net worth is currently estimated by Forbes at USD13 billion. That he is a nonagenarian (95, at the time of publication) still very much in control of the vast global business empire that is the Kuok Group, with several of his children in key and leadership positions overseeing entire regional markets and money-spinning divisions, is worth noting.
This story is from the February 2019 edition of Business Today Malaysia.
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This story is from the February 2019 edition of Business Today Malaysia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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