Who are successors to Philippine business leaders?

You are not here merely to make a living. You are here in order to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement. You are here to enrich the world, and you impoverish yourself if you forget the errand. — Woodrow Wilson

Thanks to ANC TV host, former Bloomberg news agency bureau chief and STAR reader Coco Alcuaz for recently interviewing this writer about Philippine tycoons’ successes and the Philippine economy. I am sharing some of his questions and our answers.

One of the questions of the ANC host was about succession. Who among the aging business leaders are the best prepared in terms of succession plans?

IPO Is One Good Strategy To Ensure Good Succession

On the show, I said some business leaders in Asia are very private or even secretive about their succession plans, but the advantage of entrepreneurs in this modern era is that unlike our forefathers, not a few family businesses have boldly gone public by listing their shares on the stock market to help ensure better stability and clearer succession.

With the option of having publicly listed firms, even if family members are not interested in or not capable to run the business, they could just sit on the board and allow professional executives to manage the enterprise with the checks and balances pressure of public scrutiny helping them to perform better. 

The Initial Public Offering (IPO) is ideal even for small or medium-sized firms. Even if relatives disagree on how to run their family firms, they could just sell their shareholdings in the stock market at fair market prices and cash out without sinking the boat.

Rags-to-riches shopping mall king Henry Sy has obedient and diligent children already now at the helm of various publicly listed businesses. They include Teresita “Tessie” Sy Coson of the biggest bank BDO, Henry Sy, Jr. of top realty developer SM Development Corp., Hans Sy with SM shopping malls and China Bank, Harley Sy, Herbert Sy and Elizabeth Sy.

Of all the tycoons, John Gokongwei, Jr. is the most conscious about the need for succession planning and strategic planning to ensure the long-term future of his businesses due to the success of his immigrant great-grandfather, Cebu entrepreneur Pedro Gotiaoco, which didn’t last beyond three generations. His successors in his publicly listed firms include his younger brother James Go, his son Lance Gokongwei, children like Robina Gokongwei-Pe or Lisa Gokongwei-Cheng plus other kins and professional executives running publicly-listed firms.

Metrobank Group taipan George S.K. Ty also has hardworking and obedient children like Arthur Ty and Alfred Ty as successors, along with outstanding professional executives like Fabian Dee of Metrobank.

Low-profile but successful publicly listed Filinvest founders Andrew Gotianun and wife Mercedes Tan Gotianun have children led by Josephine Gotianun-Yap and Harvard-educated son-in-law Joseph Yap at the helm. Next to be publicly listed this year is the Gotianun family’s East West Bank, which will mark the first-ever IPO by a Philippine bank in eight years. 

The Harvard-educated brothers Jaime Augusto Zobel de Ayala and triathlete Fernando Zobel de Ayala have already taken over as chief executive officers of the Ayala conglomerate from their father, the artist-photographer and former Ambassador Jaime Zobel de Ayala.

The Ayala Group also has a deep bench of outstanding professional executives like Ernest Cu of Globe Telecom, Aurelio Montinola III of BPI and Teododo “TG” Limcaoco of BPI Family Bank; these three executives are themselves reportedly billionaires in their own right, with Montionola and Limcaoco coming from prominent business families.

Billionaire realty developer Senator Manny Villar and wife former banker Cynthia Aguilar Villar are not old, but they already have three children who are good and obedient successors, the Wharton-educated brothers Paolo and Mark as well as the Ateneo-educated Camille Villar who has recently become chief operating officer of the high-end realty businesses Brittany Corp.

The twin billionaires Jose Concepcion, Jr. of RFM and Raul Concepcion of Concepcion Industries represent the successful second generation in their family. The third-generation of many cousins are active in their family businesses led by Go Negosyo proponent, STAR columnist and RFM boss Joey Concepcion.

Andrew Tan of Megaworld is still young, but his kids are already working in his businesses and he is among the most sophisticated in strategic thinking when it comes to IPOs and institutionalizing his entrepreneurial success.

One of Asia’s wealthiest and also enigmatic taipans is Lucio C. Tan, who has also gone on to publicly list some of his firms but has not yet fully disclosed his detailed succession plans. I told Coco Alcuaz that Lucio Tan is among the most clever business leaders, so he might yet surprise the business community with his long-term future plans or strategic moves.

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We Need Broad-Based & Affluent Middle-Class

Coco Alcuaz of ANC asked whether the taipans are mystified that most of our citizenry prefer not to save money or are more laidback. My reply is that years before the “It’s More Fun in the Philippines” marketing slogan of the Department of Tourism, some taipans like Henry Sy, Sr. of SM Group and even young ones like the Cathay Land CEO Jeffrey Ng, new chairman of the Association of Young Filipino Chinese Entrepreneurs (rebranding of Anvil Business Club, which will celebrate its 20th anniversary on March 16 at the Manila Peninsula Hotel ballroom), told me our laidback lifestyle is one of the natural competitive advantages for Philippine tourism.

 AYFCE honorary chairman George Siy of Marie France/Facial Care also looks forward to better Philippine-China ties in order to boost Philippine tourism similar to what is happening now in Taiwan, Thailand, Malaysia and Hong Kong with huge China tourist arrivals.

On the question of savings, several taipans have told me that there is really a need for the Philippines to encourage a higher national savings rate and also to expand the local middle-class. They pointed out that other taipans in neighboring Asian countries are several times richer than them due to the fact that their societies have bigger and broader-based affluent middle-classes.

I agree with the taipans that instead of our present pyramid-style socio-economic structure with small upper and middle-classes while the masses are poor, we need to expand the middle-class with faster economic growth and better social policies. This will not only make our business leaders and top firms truly become world-class in success, but a broad-based and rich middle-class is essential for genuine democracy, for dynamic free enterprise and for long-term socio-political stability.  

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