SORIANO
They can be compared to firefighters putting out a fire before it gets out of control.
For Wong and Bernstein (W+B) Advisory Group, a Manila-based advisory firm, they rush in to put out the fire and heat stirred by internal conflicts in family businesses.
The firm recently set up shop here in Cebu after seeing the pressing need to help family businesses resolve their respective internal conflicts.
Enrique Soriano, W+B Advisory Group executive director, said the number of existing family-run ventures here has made Cebu ripe for their services.
“We held a talk in November 2016 where 60 people came. After the event, six people, each representing a family business, approached me and said they had conflicts within,” Soriano, a senior family business coach, said during the opening of W+B’s office in Mandaue City, Cebu last Saturday.
Soriano said the fact that 10 percent of his audience during the talk claimed to be experiencing family problems in their businesses was a cause for alarm.
Internal issues
Based on their analytics, internal issues cause companies to fail more than external factors, he added.
He explained that conflicts in family-run businesses may stem from sibling rivalry rooted since a very young age, succession issues, money, and next-generation members’ sense of entitlement.
Conflict within some family businesses in Manila has led to the filing of several lawsuits by one family member against another and even murder, he added.
Firm steps in
Before it comes to this, Soriano said W+B steps in to prevent any potential conflict and to educate families about governance.
He said there should be rules set up for the family, the business, and regarding ownership, while strict compliance should be observed.
Once these are achieved, the advisory group can then move on to guiding families on how to expand their business such as making an Initial Public Offering (IPO), selling bonds, and improving branding.
“There has to be unity, focus, commitment, and passion first. By then, we can easily move on to growing the business because there are no more emotional issues,” said Soriano.
In the Philippines, 70 to 78 percent of businesses are run by families, the oldest of which include the Ayala and Aboitiz groups, among others.
Cebu clients
W+B has served clients from Cebu since its establishment in 2009, but having an office here would make it easier for family members to attend sessions.
Depending on the needs of a business, the number of sessions may run from eight to 11, with the group meeting families once a month.
Soriano said the move to locate in Cebu was also seen to help expand the market for small and medium-scale enterprises, helping raise their awareness on the importance of governance.
Around 40 percent of W+B’s clients here and abroad, including Asia Pacific and North America, are high net worth companies ranging from $100 million to $10 billion, while 50 percent are medium-sized, having as few as 50 employees to as many as 1,000.
Out of 10 family businesses, seven are on the verge of legal conflict while three have been able to prevent it.
Soriano said their group intends to switch the numbers, adding they “want to fix the problem before it goes out of control.”
Cebu office
He said they have helped around 135 families since 2009, more than 12 of which are from Cebu.
The group had to decline eight families from Cebu last year due to the surge of clients wanting to set an appointment through their Manila office.
Through the Cebu office, Soriano hoped they will be able to serve more clients in Visayas and Mindanao.
Aside from its headquarters in Manila, W+B also has alliance offices in Singapore and Vietnam as well as operations in Ilo-ilo City.