Wednesday, 19 June 2024

Empowering next-generation family leaders

5 min read

By Richard Hartung

Founding academic director of Business Families Institute, Annie Koh, and its current academic director, Kenneth Goh, discussed the trends shaping Asia’s leading business families and how BFI supports their growth and creation of impact.

  • Large family-run businesses in Asia are focusing more on sustainability, doing good, creating impact and enabling the next generation to create new businesses.
  • BFI is supporting family businesses with research-based education, engagement, building an ecosystem and case studies.
  • BFI uses a 4G framework for that support: multi-generation success, enabling business growth, creating a giving mindset, and global connectivity for families.

Business Families Institute (BFI), created in 2012 at the Singapore Management University (SMU), helps families build sustainable and impactful enterprises across generations and  strengthen the ecosystem of business families by addressing issues such as succession, family governance, entrepreneurship and wealth management.

Family business priorities and trends

The future is about sustainability, said Annie Koh, founding academic director of BFI. Even though many families want their businesses to be more sustainable, they may not be prepared. “You may not be green now,” she said. “If you have the aspiration to be green, you have to internalise it. It takes time. Transition risk is the biggest risk.” The talent shortage is tremendous, she said, so programmes are being set up to develop skills across the six schools at SMU. “The whole of the university is working to create the talent pipeline.”

Annie Koh,

Founding Academic Director,


More broadly, Koh said, “the business of good has become the call for many families.” To support this trend, its current academic director Kenneth Goh said BFI is helping families understand how they can create an impact and even go beyond environmental, social, and governance (ESG) metrics. “Creating an impact is something we are trying to capture,” he said. Thinking more broadly about impact can include philanthropy, human capital, and not laying off workers or leaving them by the wayside.

Enabling that shift, capturing insights into what’s being done, shining a light on pockets of activity that tend to be overlooked, encouraging business families to get on that journey, thinking about decisions to preserve legacy and being interested in the poor can be part of that journey, even if they are not captured in ESG metrics. “The metrics are limited in their focus,” Goh said. “Standards come from overseas. If you are a private business owner, you don’t need to follow these standards. This doesn’t mean you’re not doing good. Let’s come up with others to capture the full range of activity and encourage families.”

Another trend BFI is seeing, Koh observed, is that the next generation is being allowed more freedom to set up their own businesses. “In the beginning,” she said, “the founder mentality is very strong. They are the original entrepreneur. As the children come back, (the founders) realise you cannot have kids going to work so unhappy. We say, ‘you are running the core business. Let the next generation earn their credits, give them something else to work on.’ The next generation are the ones driving the innovation, driving new businesses.” Koh is working on case studies showing the transformations of business groups based on these new startups.

Creating impact

Creating impact is indeed a core part of what BFI is working to accomplish. “Our mission,” Goh said, “is helping families on their journey of creating sustainable impact. It’s not just about growing the business. It’s about what you do with that wealth, thinking about how to create impact.”

“When we talk about impact,” Goh said, “we want to go beyond attitudes. The challenge is how we get action. That’s where we bring in our management expertise across the schools of SMU. When we talk about sustainability, we give tools for next generation leaders to manage that dynamic, handle naysayers,” since the current generation of corporate leaders may not be fully supportive. “We use those tools to enable the next generation to become more sustainable.” The practices go beyond the managerial challenge, Goh observed. There are governance, structural and trust issues, and the family bank needs to support these initiatives. “That’s where we draw on our lab work to enable next generation leaders to enact transformation.”

Kenneth Goh,

Academic Director,


Along with knowledge and education, Goh said, BFI is working to create a community of like-minded families and building an ecosystem for sharing knowledge – as well as for commiserating when challenges arise.

The creation and growth of BFI

“A large part of Asia is family-owned,” Annie Koh said, so BFI was established as a new initiative ten years ago to take care of business family owners. The name is important, she observed. “Family business is the descriptor. We don’t want to be called FBI. We put families at the centre. As businesses go from one generation to another, they may transition. Business can change. Families stay in harmony, understanding core values, guided by the ethos of making a difference in the community that works with them. That’s the vision. Having wealth entails having responsibility of using that wealth right.”

Along with a core group of ultra-wealthy families, she said, “we have gathered many small and medium enterprises that are family-owned. It would not have been sustainable with only the big boys.”

Koh said BFI leaders used a 4G concept to anchor the thinking as it was set up. The first G is generations, she said. Many families “are in their critical third generation. A common saying is that the third generation is going to squander the family wealth.” She brought in families who are thinking beyond the current generation, to look at the family business lasting for many generations.

The second G is growth, since “there is no way you can look after multiple generations if you do not have a growth mindset.” That said, she observed that many families sell their ongoing business and become investment companies. Along with helping families grow their businesses, BFI also helps families share stories of how they sold off the business when the next generation didn’t want to be in the business. “This resonates with many families.”

The third G is giving. “A lot of people thought giving means philanthropy,” Koh said. Beyond that, and as part of transitioning from business to wealth management, “you think about how you are investing in the right things, giving back to the community, creating social programmes, developing human capital, funding social enterprises.”

The last G is global. Global connectivity, responsibility is everybody’s business,” Koh said.  While the business may be global, she said families sometimes “lose the kids” who want to stay overseas after they go abroad for education, so it is important to engage young people and bring them home.

To support the families, BFI shares research and best practises. Engagement sessions, for instance, enable families to share stories about topics such as family dynamics, how to decide on a successor, and how to get professionals with the right values to act as mentors when the next generation is not ready to lead the business.

To enhance that engagement, BFI takes families on cross-border learning journeys, such as gathering business families in Thailand for networking. “That’s how you build trust,” Koh said. “We have done trips to Thailand, Philippines, Indonesia, and Saudi Arabia.”

BFI has also developed case studies and created a pan-Asia family business casebook with cases and stories from Japan, Taiwan, Shanghai. Singapore, Indonesia, the Philippines and other markets. Additionally, Koh said, “we create live sessions around those cases. You hear from the actor himself.”

Many family businesses need help from advisors, and family members who have created startups may also need advice or assistance from professionals. BFI is creating an ecosystem of support and is also training professionals such as bankers, accountants and lawyers.

BFI also works with private banks on their next-generation programmes. Even though the banks have an agenda of growing their assets under management (AUM), private banks have access to a different set of resources and collaboration can be beneficial. Since BFI is   non-profit, it can be viewed as a neutral party looking out for families rather than seeking to increase profits.

“Our goals are long term goals,” Goh said,” to get families on their mission of creating sustainable impact. That is a success. That could be five, ten years. I don’t want to set a short-term target.”



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