When silence isn't golden: Succession challenge looms for Asia’s wealthy families
SINGAPORE – When Mr. Zong Qinghou, the founder of the Chinese beverage empire Wahaha, passed away in February 2024, the public mourned the loss of a self-made tycoon who was once China’s richest man. But a year later, a shocking revelation shook the family's reputation. His three “secret children” from an extramarital affair sued his only publicly acknowledged daughter over their inheritance, thrusting the family – and the Wahaha brand – into the spotlight for all the wrong reasons.
This legal battle has become a cautionary tale, highlighting the pitfalls of silence and secrecy in succession planning. It can not only disrupt family harmony but also jeopardize the reputation of the companies these business magnates spent decades building. The case underscores the importance of transparent and well-planned succession strategies.
The wake-up call is evident in the growing acknowledgment of the need for proper succession planning among Asian founders. Mr. Chew Mun Yew, head of UOB Private Bank, noted that the “spectacular failures” of families who didn't get succession right have led many to recognize the importance of this process. This realization is particularly evident in the surge of high-net-worth clients at UOB, with nearly 70% being business owners, mirroring the region's rapid growth in global private wealth.
According to the Asia Generational Wealth Report 2025: Succession In A New Era, compiled by UOB Private Bank, the Boston Consulting Group (BCG), and the NUS Business School, Asia's share of global private wealth has skyrocketed from 6% to 21% over the past 25 years. By 2029, this figure is projected to reach a staggering US$99 trillion (S$129 trillion), a quarter of the global wealth. However, the study also reveals a significant challenge: many family business founders are reluctant to let go of control.
Of the 46 founders surveyed, 37% said they will only hand over the reins if poor health forces them to. A similar percentage (37%) prefers to make decisions regarding family wealth independently, and 28% have prepared wills that are not disclosed to their heirs. This reluctance can lead to conflicts, especially with complex family structures or extramarital heirs, as secrecy often triggers disputes.
The good news is that younger or next-generation business leaders are more open to transparency. Only 13% of the 69 surveyed make decisions on wealth matters alone. Instead, 87% hold family meetings, and 52% go further by establishing family charters, written documents outlining ground rules for managing family affairs, from business ownership to succession planning and conflict resolution.
Mr. Ernest Saudjana, a senior partner at BCG, noted that families are increasingly open to using family charters as a governance tool. The focus is not just on wealth transfer but on building a legacy and ensuring the family business survives beyond the third or fourth generation, a common challenge for wealthy families.
One success story is Royal Selangor, a Malaysian pewter-maker now in its fourth generation of family leadership. Since 2002, the company has had a family charter outlining details like retirement age and family retreat frequency. A notable rule is that family members must work elsewhere and gain experience for at least two years before qualifying for a job in Royal Selangor, ensuring a well-prepared and experienced leadership team.
The study emphasizes that clear rules can help families align expectations and prevent disputes from destabilizing the family business. However, many surveyed families still prefer their businesses to be led by a family chief executive, fearing loss of control to outsiders.
According to the report, 72% of founders see their children as likely successors, but 28% acknowledge a lack of interest from heirs, and 24% believe their heirs are under-prepared. Prof. Yupana Wiwattanakantang, a specialist in family capitalism, emphasizes that a company's longevity depends on being led by the best-qualified person, appointed based on meritocracy, not birthright. Families should not confuse ownership with leadership.
Beyond wealth and leadership transfer, Prof. Yupana stresses the importance of knowledge transfer. Founders' experience, values, and understanding of business success must be passed on to the next generation. Succession planning, she adds, is an opportunity to instill a long-term mindset, sustain the family legacy, and foster a sense of purpose, not entitlement.
As the Japanese proverb goes, 'You sacrifice yourself, but the house will live.'
