FAMILY BUSINESS, A PERSONAL
EXPERIENCE.
Peter Beynon, Jardine Matheson, Country Chairman Myanmar.
CONTEXT OF DISCUSSION.
Peter Beynon, who I am.
Qualified ICAEW Chartered Accountant, associated with Institute for
Family Business (see ifb.org.uk).
Worked in family business for over 30 years.
Jardine Matheson.
Olayan Group.
Al Fahim Group.
SUCCESSFUL FAMILY BUSINESS
Successful family business owners learn to manage two facets of
governance.
Corporate Governance, covering the direction of the
business operations.
Family Governance, providing a framework of rules that
define family members roles and responsibilities and how the
family intreats with their business.
GOOD FAMILY GOVERNANCE
Good family governance can take any
forms, but its key function is to promote
effective ownership communication and
deliberation.
Large family ownership group need to be
educated about the business, its history
and its current challenges. They need to
understand the values, vision and goals of
the business and the family and how these
are related and support each other.
The family itself must make decisions
including fundamental decisions about how
it will govern both itself and the business.
FAMILY BUSINESS DYNASTIES
A dynasty is a sequence of rulers from the same
family. It was usually in the context of a feudal or
monarchical system. The dynastic family or
lineage may be known as a "house"; this may be
styled “royal" or "princely", depending upon the
chief or present title borne by its members.
Historians consider many sovereign states'
histories, such as Ancient Egypt, and Imperial
China, within a framework of successive
dynasties.
• Jardine Matheson
• Olayan
• Al Fahim
Charles 1st to James 2nd.
AL FAHIM GROUP
Pioneered by Abdel Jahlil Al Fahim in
1958.
Grown into a diverse property,
services, hotels and automotive group.
The elder son Mohammed was
integral in developing the Group as it
exists today.
Family conglomerate is one of the
largest private businesses in the Abu
Dhabi Emirate.
THE AL FAHIM FAMILY TODAY
Mohammed
Abdullah
Saeed
Ahmed
Abdul Jahlil Al Fahim
The family is now in the
second generation.
Taha
Eissa
Aamer
Rashed
The 8 sons span almost 3
generations.
MANAGING DIRECTOR
The family appointed PB as the
MD in 2005.
Corporatize the business.
Build a sustainable legacy business
for the family.
Make it shari'ah compliant.
Prepare the business for a
possible IPO on the local bourse.
OLAYAN GROUP.
Sheikh Sulieman Olayan was made
an orphan at six and went on to
become one of the wealthiest
independent businessman in Saudi
Arabia.
in 1947 he founded a business
empire on trading and supply goods
and services to the oil industry.
Prodigious memory and had a
exceptional ability to see things how
they could be not as they were.
THE OLAYAN FAMILY TODAY.
Lubna Olayan
The Olayan family group has over
50 operating companies world
wide.
Net worth in excess of US$12b
in 2010.
Significant stakes in Credit Suisse,
Chase Manhattan, Wells Fargo.
Led by the middle daughter,
Sheika Lubna Olayan.
Sheikh Khaled Olayan
Hutham Olayan
JARDINE MATHESON.
Asian based conglomerate since 1832.
Fifth generation of Keswick’s direct
descendants from the founding families.
Ben Keswick is the 7th to be Tai Pan.
Keswick’s are direct descendants of Dr.
William Jardine.
In the top 200 Publicly listed company,
worldwide. Listed London and Singapore
with market cap US$ 42b.
William Jardine, James Matheson
Directly, family control 3.7% of the
shares, through trusts less than 10%.
JARDINES, THE “NOBLE HOUSE”.
Jardines has been known as the Noble
House…. well before James Clavell penned
his novel of the same name in 1981.
The novel seemed to foresee the events of
the early 1980’s when the group came
under attache from Sir YK Pau, shipping
magnet.
Group’s balance sheet was under sever
pressure when it acquired Exchange
Square site in Hong Kong and the property
market crashed post 1984 UK declaration
which needed Hong Kong back to China.
JARDINE MATHESON STRUCTURE.
The complex cross shareholding
was introduced in 1986 as a
“poison pill” to ward off predators.
Li Ka Shing post HKL acquisition of
Exchange Square.
Both JMH and JSH are listed
entities.
Brandes Investment Partners, San
Diego fund management group
sought to unwind the structure in
2001.
OBSERVATIONS ON FAMILY
BUSINESSES - GOOD AND THE BAD.
It is not really for me to opine on what is good and bad. The
family after all have “the right” to decide how the business is run
within accepted social boundaries.
I can highlight some of the things I see as important and relevant
in the family business context.
CLARITY OF VISION.
Clear vision for the business and
clear role for the family within
the business.
Delineation of the family and
the corporate.
Accepted by all family
members.
Dis-harmony causes strife and
uncertainty.
MERITOCRACY WITHIN BUSINESS
Business officers appointed based
on professional knowledge and
qualifications.
Start at the bottom and work
up.
Accelerated promotion.
But……..Dubai Pearl.
COMMUNICATION AT ALL LEVELS
The family are seen to be treated
equitably.
Approachable and not aloof.
Olayan and the Gulf War.
Al Fahim, office timing.
SACRED COWS
Family businesses have their
indulgences.
Not everything is run for profit.
Much wider agenda that drive
family values.
SUCCESSION PLANNING
It is often said that the first
generation create the wealth and
the second lose it or abuse it.
Succession planning is vitally
important.
Based on ability and not seniority.
EFFECTIVE LONG TERM STRUCTURE
Consider the most applicable
structure.
Corporate.
Listing.
Family trust.
Family office.
Split the business.
Thank You