WHEN succession goes very wrong, it can be fatal.
The case of Mayfull Foods Corp. is a lesson to founders and family business leaders in Asia not to take succession for granted. Questions of succession should never be a side dish nor an afterthought at the moment they begin to consider retirement. The planning starts when the enterprise is established.
Mayfull Foods Corp.: Ticking time bomb detonated after patriarch’s death
Mayfull is a $3-billion business and one of Taiwan’s biggest food importers of meat products. Established in 1963 as a professional food supplier, it is heavily involved in wholesale, food service, retail, logistics and hotels and the family is behind the famed Miramar Group.
Shortly after the death of Mayfull’s founder Huang Jung-tu last year, a meeting took place between his six sons to discuss how to split an inheritance left by their father.
According to the China Post, after a heated argument and provocation, the fourth son, Huang Ming-Te, 54, allegedly shot his older brother, the second oldest son, in the head. Another older brother who was then chairman of Mayfull Foods, after rushing forward in a bid to stop Ming-Te, ended up being shot on the spot.
In the conference room, two men lay dead or dying, after being shot at close range in the head. When the police arrived, Ming-Te ended it all by putting a bullet to his head and fell from the seventh floor of building’s rooftop.
The bloody scene that happened exactly a little more than a year ago was the culmination of a bitter family dispute and a succession gone horribly wrong.
This particular conflict may be a rare occurrence, but I have written many local cases (Ilusorio, Romero, Cosmos’ Wong families among others) of families in dire straits where the acrimony started with some petty misunderstandings, unresolved issues but escalated into a full blown conflict involving sabotage, legal suits, physical injury, fight for money, succession battles and sibling rivalries — sounding more like an entire season of “Game of Thrones” but in real life.
Why is there conflict? Founders tend to choose the “do nothing” option
It all boils down to poor succession planning or plainly, the founders or senior generation leaders completely ignoring it. Again I wrote about the single biggest mistake of leaving the “elephant in the room”, thinking that the children, through time, will end up fixing the ownership issue. Basically, reiterating that the single biggest mistake was choosing the “do nothing” option.
I can almost guarantee that in the coming years, we will see a common occurrence of unnecessary and senseless conflict and rivalry among Asian-based family-owned businesses. I should know, succession conflicts are getting to be pervasive in countries where I coach families owning businesses.
Why is conflict inevitable? Equal inheritance and the baby boomer generation
In a governance article sourced from online magazine Family Capital, the concept of equal inheritance in Asia most notably amongst the Chinese appears to be fraught with problems and a real source of unnecessary flash point.
The magazine article underscores that in the Asian context, “tradition dictates that inheritance is split equally among siblings, or at least male siblings thus equal inheritance can often lead to disputes, particularly when families don’t adhere to it.”
It highlighted a somber assessment…”the dispute over Mayfull Foods might have had something to do with this finding…that the killer son, Huang Ming-te, felt the pressure of increasingly being sidelined by his other brothers. He may have felt that his family weren’t honoring the tradition of equal inheritance.
Sibling disputes over the control of companies among Chinese-businesses are relatively common. But again, with the appropriate intervention tools like governance and a set of ownership rules, the long-term growth prospects of the enterprise is preserved.
Expect an avalanche of succession issues
The number of big successions is slated to happen within the next five to 15 years in the region. That’s because many of Asia’s business dynasties were set up after World World II. According to Family Capital, the founders who are now reaching the end of their line, if caught unprepared, will have no other option but to confront these imminent succession problems.
As I have repeatedly said, start your succession early, as early as when you were starting your business and stop procrastinating. It is the thief of time.
Prof. Soriano is a National Agora awardee for marketing excellence, an ASEAN family business advisor, book author, and executive director of ASEAN-based consulting group, W+B Strategic Advisory. For those interested to grab a copy of Prof. Soriano’s book entitled “Ensuring The Family Business Legacy”, please call W+B Group at 09228603186 and look for Jen. Prof. Soriano’s business articles can also be accessed at www.Faminbusiness.com.