The View | Succession planning could dip a toe in deeper pool of talent
Founders were wheeler-dealers but other skills are needed to sustain and develop a mature business
When Henry Cheng Kar-shun appeared last week alongside his son Adrian Cheng Chi-kong to talk about New World Development’s plans, reporters were quick to focus on what interested them: the company’s succession plans.
It is however hardly a secret that leadership of New World will pass to Adrian Cheng in the same way that Henry Cheng took over from his father, the company’s founder, Cheng Yu-tong. However Cheng Senior remained very much in the frame, regardless of the sign saying “chairman” on Henry Cheng’s desk.
New World’s situation is similar to that of most of Hong Kong’s biggest companies, where the founders are getting a lot older and succession plans generally involve just one set of people: their sons. Indeed it is hard to think of any major conglomerate that has not reached this stage of development, be it the Cheung Kong group, the Lee Shau-kee empire or Sino Land and so on.
In other parts of the world corporate leadership is drawn from a much bigger pool than that defined by family ties and succession is always an issue, and promotes concern particularly at the point when the company passes from the founders to the next generation of leaders.
The founders are getting a lot older and succession plans generally involve just one set of people: their sons
However there are examples of successions being handled in a way that sustains investor confidence. A case in point is the succession of Tim Cook to the leadership of Apple in the wake of the untimely death of its founder Steve Jobs. The dynamic Jobs was a hard act to follow but Cook appears to be doing pretty well, a success reflected in the considerable growth of the company’s business under his leadership.
How will succession work in Hong Kong’s biggest companies? It is too early to supply a definitive answer but look what happened at the Hang Lung Group, which was part of the small coterie of the territory’s biggest property developers while under the leadership of its founder Chan Tseng-Hsi. After the company was taken over by his son Ronnie Chan, Hang Lung fell back into the ranks of also ran developers as the new chairman focused on mainland investments with distinctly mixed results.
