Guiding Light
Issues arising from a transition can be avoided if families set guidelines for the future, founder and Chairman of Shui On Group Dr. Vincent LO says.
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From personal experience and close observation of others in a similar position, Dr. Vincent Lo Hong-sui has learned that passing on the wealth, assets, values and culture of a family- centered business to succeeding generations is never easy.
Differences of opinion are bound to occur in a situation where big decisions must be made about everything from corporate structures and strategies to investment priorities, management philosophy, timescales, and the assignment of individual responsibilities.
But all those matters can be discussed and resolved, with the avoidance of acrimony and angst, if the parties involved can agree on a basic set of ground rules.
These guidelines should be realistic, practical, forward-looking, and formalized. They should recognize a clear distinction between the operating business and the family. They should also allow for the possibility of evolution and change as the next generation comes into the picture and naturally assumes more influence over day-to-day calls and the direction of the business.
“Every family is different,” says Lo, the founder and Chairman of Shui On Group, the Hong Kong-based property firm which, over the past few decades, has done much to transform the urban landscape of central Shanghai. “But it is important to plan early, so things can be in place and the younger generation can understand and participate in the process.”