Matthews Asia: Family Owned Businesses – Why Family Matters?

During a recent visit to Southeast Asia, I recalled the importance of family owned businesses in the region. On my trip, I observed a trend toward greater involvement from the second generation of family members in running such businesses. As investors, we believe management transitions are important to monitor as they can sometimes lead to changes in strategy, operations, organizational structures and controlling ownership. Family owners generally have a keen interest in ensuring that the transition to the next generation goes smoothly. “The (so-called) Chinese family curse is to be avoided,” one family member told me, referring to an expression that states that wealth does not pass three generations.

Obtaining the proper structures for governance and control to ensure sustainability of...