MANY business families are facing a new reality in terms of how they create wealth and allocate their capital. After a lifetime of having the family’s wealth almost entirely bound up in their business, business families are recognizing that they need to de-risk and diversify their wealth in today’s more volatile and unpredictable environment.The concept of capital and how it is allocated in family businesses are evolving.
KPMG in the Philippines Private Enterprise Sector Head Jerome Andrew H. Garcia further shares: “As with any other sector, the pandemic and its adverse effects on businesses became an important driving force for family businesses in the Philippines to push forward new and innovative practices to ensure survival in an unstable economic environment.
Families are prioritizing funding new ideas and ventures of the next generation, which assist with the diversification strategy.THE family itself, and its purpose and values, is one of the largest and most influential human capital assets. It represents the socioemotional wealth that is associated with being part of a family in business.
They aren’t willing to risk the impact that such actions may have on their reputation and the potential damage to the trust in their brand if people began to view their family and company in a different—and potentially negative—light.