Family Succession in Malaysia

A proper succession plan is very vital to ensure business continuity. It is important for family businesses to break the curse of having a poor survival rate after passing on to the second and third generation. In this regard, Malaysian companies are well versed and are aware of the importance of succession planning. Many of the big cap Malaysian companies have developed a succession plan. These companies have put in place a leadership and business training programmes to ensure a smooth succession plan.

 

Develop an exit strategy, and then communicate the details to the appropriate persons. They need to know their role and importance in the business succession vision.

 

Develop a process to integrate family members within your management team without disrupting current operational performance. Partner with key management to develop education, experience and training requirements for advancement within your company. Create bench strength by engaging key managers in mentoring activities with family members and upcoming talent.

 

Preclude family disagreements by clearly defining expectations about employment criteria, proper attitudes/behaviors, required training and experience for available positions. Use a facilitator or moderator to formally discuss agreements and solve problems.

 

Distribute Your Estate Equitably, Not Equally
Think about distributing assets that are meaningful and equitable in worth, rather than letter-of-the-law equal. Stock in a business that is subject to risk is not as valuable to an uninvolved child who may prefer more stable assets. Communicate your planning and reasoning with all appropriate family members. It is better for them to hear this from you, rather than from an attorney at the reading of the will. Remember, surprise can destroy family harmony.