WORLD’S 500 LARGEST FAMILY ENTERPRISES GREW REVENUE BY 10 PCT

KUALA LUMPUR, May 3 (Bernama) -- The 500 largest family businesses in the world generated US$8.02 trillion in revenues and employ 24.5 million people worldwide across 47 jurisdictions, high enough to be the third largest national economy by revenue, behind the US and China.

Ernst &Young (EY) Consulting Sdn Bhd said in a statement that out of 500 family enterprises, 17 are from Southeast Asia, including four from Malaysia and Thailand, five from the Philippines, and two from Indonesia and Singapore. Together, they hire close to 850,000 people with the average age of board members at 62 years.

EY Asean family enterprise leader Low Bek Teng said this underscores the need for Southeast Asia’s family enterprises to examine board renewal and a transition to the younger generation, and this needs to happen within the next few years.

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As these enterprises grow in size and complexity, a good succession plan becomes imperative because there are cases of family enterprises facing governance challenges or internal conflicts when transitioning to the next generation.

“Hence, conducting succession planning earlier and communicating regularly to manage differences will go a long way to ensuring the long-term survival of the company,” he said.

At the same time, the current economic challenges -- resulting from geopolitical risks, rising inflation and interest rates -- mean that family enterprises may need to take immediate and additional steps to protect their asset value and investments.

 They will need to understand the relevant risks and how each of these risks may impact their businesses.

Bringing in the next generation to work and learn alongside the current board and management will help the younger team better appreciate the intricacies of the business, he said.

Even though successful family enterprises are recognised for being agile, innovative and purposeful, there is still some way to go with gender parity.

EY said globally, around six per cent have a female chief executive officer (CEO) and women hold only 23 per cent of board seats.

North America and Europe stand out with only around seven per cent having female CEOs.

When it comes to the distribution of board seats among family members, Europe leads the way with women occupying 25 per cent of family-held board seats, considerably above the global average of 20 per cent.

-- BERNAMA