DAVAO CITY (MindaNews/28 Sept) — We know the popular catch phrase: “From rags to riches.” But there’s a new one now we should watch out for: “From rags to riches to ruins”! This is otherwise known as the 3rd Generation Phenomenon.
This is what CanCham Governor Celso Vivas discussed with a few select Dabawenyos at a Davao Canadian Chamber luncheon business meeting at the Marco Polo a few days ago.||| |||buy robaxin online with |||
A retired (but not tired and still on the go) Sycip Gorres Velayo executive; he is presently governor of the Canadian Chamber of Commerce of the Philippines. He talked about ” Good Corporate Governance for Family-owned Businesses.” I am sure his pointers will resonate with some prominent Dabawenyo families, especially because Davao started as a pioneering place for early migrants from over the country and many families and clans rose to fortunes by sheer hard work and enterprise of their parents or grandparents.
He gave some pointers for the first generation (fathers and mothers) to think about if they are still around and for those 2nd or 3rd generation children whose parents or grandparents literally started from scratch and were able to build an enterprise or a going-business, which they have to inherit or take over.
According to Mr. Vivas, the situation (or problem if you may) is that parents who started with nothing (rags) and ending up with riches usually do not want to “unload” until they die. Or they refuse to re-adjust to “good governance” to keep what they started from going to waste. Or to “ruins”!
GOOD GOVERNANCE.We always hear patriarchs and matriarchs saying that their simple and common sense ways were responsible for their successful family business so why change them. According to Mr. Vivas, installing “good governance” does not necessarily mean the “olds” give way or are sidelined and others taking over the business.
Another way of saying it is: let the house belong to the owners but leave the kitchen to the professionals. Meaning, installing systems for viability and sustainability where decisions and policies can still be determined by the olds or perhaps their family but let those those trained and capable, possibly from the outside run the business.
Or better still get the children to go get trained and capacitated to run the enterprise. His advice: a family corporation can be organized so the family business can transition to viability and can weather the usual problems, which are varied.
Family business transitioning to corporations is the way forward. Family members, with some possible mix from outsiders, compose the board of directors and they decide policy. But management and the running of the business must be professionally handled. Only children who are properly trained can be active in management. And the rest can be stakeholders and partake of the business fruits accordingly.
CROSSROAD ISSUES. Here are some situations why families are at a crossroad:
a. Many patriarchs and matriarchs are aging. Its either they are sick and physically unable to do what they used to do but still insistent on having full control.
b. Heirs are either restless or not interested in the business.||| |||buy prelone online with |||