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Labuan IBFC and The Economist Intelligence Unit (EIU) Announces Research Findings into Family Business Succession in the ASEAN Region
Press Releases
  • EIU study says two-thirds of Southeast Asian family businesses have leadership succession plans
  • 71% of family businesses say succession plans make winning investment easier
  • More than half of business families use informal gatherings for family governance
  • Despite their focus on succession, businesses not confident about long-term ownership structures

KUALA LUMPUR, 11 November 2014 – A new report commissioned by Labuan International Business and Financial Centre (Labuan IBFC) says leadership succession planning is a priority of family businesses in Southeast Asia because of its perceived importance in attracting investment.
 
The report Building Legacies: Family Business Succession in Southeast Asia, by The Economist Intelligence Unit (EIU), is based on a survey of executives in the region. The survey finds 67% of family businesses already have succession plans in place.
 
Saiful Bahari Baharom, Chief Executive Officer of Labuan IBFC, said: “Family-run businesses account for more than 60% of all publicly-listed companies in Southeast Asia, making them an essential part of the region’s growth. Labuan IBFC, cognizant of their contribution to the region’s prosperity, commissioned this report because we believe intermediaries, accountants, lawyers and wealth managers will be interested in such a study, which will assist them in their business.”
 
Two-thirds of survey respondents agree that customers and investors have more trust in a family-owned business with a succession plan than in a business that lacks one. Seventy-one percent of family business leaders say it is easier to attract investment with a succession plan in place.
 
Despite the majority of family businesses saying they currently have a leadership succession plan, only around half of executives expect the ownership structure of their companies to remain the same in a decade compared to nearly three quarters in five years, the report says. Discussion to form succession plans often takes place in informal settings, such as family council meetings.
 
Kevin Plumberg, the editor of the report, said: “Family businesses are the backbone of Southeast Asia’s economy. It’s a sign of their maturity that they are making leadership succession planning a part of their long-term business strategies. However, they need to establish stronger formal governance structures to help ensure continuity beyond the next generation.”
 
The report is available for download here.
 

  
Press enquiries
 
Shamillia S. Unsworth, director, communications, Labuan IBFC
+60 3 2773 8977
Kevin Plumberg, senior editor, The Economist Intelligence Unit
+65 6428 2671
Mathew Hanratty, corporate communications manager, The Economist Intelligence Unit
+44 (0)20 7576 8546
 
Notes to editors

The report is based on a survey and interviews conducted in July-August 2014. Survey respondents included 250 majority family-owned businesses from Indonesia, Malaysia, the Philippines, Singapore and Thailand. All respondents have senior managerial responsibility at a minimum, and 50% of respondents are board members or C-level executives. Sixty-two percent of survey respondents are from companies with global annual revenues of US$150m or less, and 11% make US$1bn or more.
 

About Labuan International Business and Financial Centre

Labuan International Business and Financial Centre (Labuan IBFC) has a wide range of business and investment structures facilitating cross-border transactions, business dealings and wealth management needs. These unique qualities offer sound options for regional businesses going global or global businesses looking at penetrating Asia’s burgeoning markets.
 
Strategically located in the heart of Asia Pacific, Labuan IBFC is positioned to tap into one of the fastest growing regions in the world, presenting opportunities for businesses seeking to connect with Asia’s economies and beyond.
 
For more information, please visit www.libfc.com.
 
 
About The Economist Intelligence Unit

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. The Economist Intelligence Unit helps executives make better decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. More information can be found at www.eiu.com or www.twitter.com/theeiu.
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