Among family businesses globally, 65% have grown sales in the past year, up from less than 50% in 2010. This according to the 2012 PwC Family Business Survey which monitored close to 2,000 family businesses worldwide. In Hong Kong, family enterprises have performed reasonably well over the last year, 48% having grown sales in the last 12 months. So things are looking upbeat, with family businesses in the region confident and predicting steady growth in future—76% aiming to grow over the next five years.
Major issues
Many more family businesses are listed in Asia than elsewhere in the world. Richard Sun, Head of Entrepreneurial Group, PwC Hong Kong and China South commented, “Many family businesses in Hong Kong are very successful, however, some of them lack a professional management structure and good corporate governance standards. Lack of good corporate governance can easily give rise to internal conflicts.”
Challenges around succession are often front-of-mind and further compounded by family conflict/politics and the need to attract and motivate non-family staff. The survey revealed that only half of the family businesses surveyed have a shareholders’ agreement in place. Globally one in five has no procedure in place to deal with conflict while in Hong Kong over half of the family businesses have no conflict resolution arrangement.
The road ahead
Family firms the world over seem to trust that their governments recognise their importance. But the majority of family businesses are convinced their governments could and should do more to help them succeed, with measures such as:
- Improved tax situation for succession, and simplified processes
- Financial incentives for family business start-ups
- Easier access to finance
- Grants/incentives for research and development, and investment in new technology
- Training and support aimed at family businesses including: succession planning, international expansion, conflict resolution, professional management
Paul Arkwright
Publisher
