Mr Aggarwal: What are some of the factors that have led to the successful intergenerational transitions?

Dr Fock: Family businesses that have succeeded in completing intergenerational transitions exhibit certain characteristics. Besides the family bond of trust and commitment, there is a tremendous sense of loyalty among the family members and non-family professionals who are involved in the management of the business.

Moreover, the core value systems of these family businesses do not change drastically with succeeding family business leaders. Many of these second, third or fourth generation family business leaders have received very good professional qualifications and exposure in the West and under their leadership, they did not abandon the core Asian family values that have been passed down through the generations and embrace totally western management practices.

These leaders did a realistic appraisal of what was applicable and useful as best management practices in their family businesses. The introduction of best management practices without throwing the baby out with the bathwater aided the growth of many of these family businesses and enabled them to succeed across the generations.

Another factor not often recognised is the important role of non-family professionals in such successful family businesses. Many of the very senior non-family professionals who have worked for outstanding family business groups such as the Kuoks and that of Ong Beng Seng's group of businesses have dedicated their working careers and lifelong commitment as 'extended family members' in helping to grow these family businesses on a global platform. After all, as the business grows internationally, it is inevitable that there may not be enough family members who can take charge of such overseas ventures.

Dr Lang: I agree that the management by the family comes first and then they pass the family values not only to the next generation but also to the professional managers in the business. And when the professional managers feel valued as members and not as outsiders, they put in the contribution that is needed for the success of the family business.

Dr Wee: At the recent UOB AGM, when chairman Wee Cho Yaw was asked why he didn't go out to buy into another bank as it is a good time to do so, he said something very revealing: We are here for the long term and not for the short term.

This is the nice thing about family business because if they own 30 or 40 per cent of the company, their perspective of sustainability, the risk and the business is very different as they have to look after the interests of the family members, the clan and the like.

Family business leaders through successive generations have often stressed that they don't want the professional managers to try to squeeze out the most in the short term and compromise the business in any way because they are in it for the long haul.

Dr Ho: One of the characteristics of Asian family businesses which worries me is that they seem to get passed on to the male heirs and the female members of the family tend to lose out in the process.

I very much hope that this gets corrected going forward and the women get their fair share of the family business.

Dr Wee: Moving forward, there will be change. It is just that life for women is more challenging in terms of having to balance career with their role in the family as an ideal wife, mother and daughter-in-law. I don't think there is discrimination. It is just that women's degree of freedom in terms of choices is much less so it gives them less scope to excel. That is why, for instance, you have so few women CEOs worldwide.

Mr Aggarwal: Moving on, why are family businesses so important for the future of any economy?

Dr Fock: The family business structure is the oldest business structure in the world. The preponderance of family-owned businesses across the economies of the world can never be overemphasised as they have always played an important and critical role.

In Singapore, for example, we have around 160,000 SMEs and 88 per cent of them are family businesses. These SMEs account for 62 per cent of the workforce and 45 per cent of the GDP of the country. That is how important family-owned businesses are to the Singapore economy, and Singapore is representative of several economies in Asia whose economic growth is predicated on the success of family businesses.

Dr Lang: Because of rapid technological change, I think the family business is going to be more important than before. In the recent past, we had MNCs driving growth, but with the globalised economy now and the way new knowledge is diffused far and wide rapidly, learning too, has to be very fast.

So you need people who are entrepreneurs to capture emergent opportunities fast enough. And it is here that I see a new, critical role for family-owned businesses in being able to mount rapid responses to market changes.

Mr Aggarwal: Is it really true that family businesses do not usually last beyond the third generation?

Dr Fock: In all the literature on Asian family business - especially Chinese family business - this question is often raised. But this problem is not peculiar to the Chinese family business. The sentiment expressed in the Chinese saying that 'wealth does not last three generations' is echoed by family businesses in the West to what is referred as 'from clogs to clogs in three generations'.

Dr Lang: Statistically, 66 per cent of family businesses do not survive the founder's generation, in general. Globally, only 10 to 15 per cent survive up to the third generation.

But this data can be questioned. If I set up a business and my children are not interested, so I sell it to someone who sees value in it and carries it on. Then the business is in fact successful. It is just that it is no longer with the founding family and may in fact succeed beyond the third generation of the new owner.

Dr Wee: All businesses start when a person sees an opportunity and responds to it. He becomes an entrepreneur as he sees a need and responds to it because he has the passion to do so. As the business expands, he should, and if need be, take the company to public listing and cash out.

This is especially true if his children are not interested in the business, say, in precision engineering or hotels. By cashing out, the founder ensures the success of his business by passing it on to others who are interested to grow it further.

Meanwhile, he can raise the money to support his children in other businesses like information technology if they are interested in it or other newer fields for which they may have the interest and passion. This, in fact, is perpetuating the entrepreneurial spirit which is so essential in any society.

Dr Fock: An interesting aspect of family businesses that is not well appreciated is that the younger generations are often very well educated and trained in the best of universities in the world. Some of the scions are sent to top universities like Harvard and Stanford in the US, and to top business schools in Asia.

Some of them start by working outside the family business to gain valuable experience and prove themselves before joining the family business to help grow it further and branch into new fields.

Dr Ho: I think that family businesses should provide equal similar educational and training opportunities to their professionals in a structured way to help in their career advancement in the business so that they are equipped to make it right to the top rather than thinking that the top spots are reserved for the family members only.

Dr Lang: For family businesses to thrive into the future, values are of paramount importance. Each generation has to try to ensure that the right business values are transmitted to the next generation so that the basic entrepreneurial spirit which is the very basis of the family business, remains intact.

Dr Wee: When we talk about passing on the entrepreneurial spirit, it need not be in the same field of business. The founder need not pass on his business to his children if they are not interested in it. He should think out of the box and support them in other activities that they might be interested to venture into.

Look at Li Ka Shing. His son, Richard Li, went into telecoms and IT business. This way, the strength of the family business can spawn entrepreneurship in other fields because in a way you can afford the risk. And when this happens, it should not be seen as a failure of the original family business.

Dr Ho: Entrepreneurship does not necessarily have to come from family members alone. Look at Apple, which is not a family business. It is one of the most creative companies.

Ideas can be generated from within the business, from the professionals working in it. But this can only happen if you create the right climate for the professionals to come forward with ideas, which they know will be welcomed.

This article was first published in The Business Times.