UK Financial Services Taskforce hosted a workshop to highlight the issue of implementing corporate governance for family businesses, and its role in contributing to Myanmar’s overall economic efficiency and competitiveness.
The workshop drew participants from the government and businesses, including Professor Aung Tun Thet, economic advisor to President U Thein Sein, Dr Maung Maung Lay, vice president of the Union of Myanmar Chambers of Commerce and Industry (UMFCCI), as well as over 50 representatives from the domestic and international business sectors.
British Ambassador to Myanmar Andrew Patrick said, “British businesses are increasingly interested and active in this country and many want to partner with local companies. … A key challenge in maximising these potential relationships will be ensuring that there is a shared understanding and application of Corporate Governance. We are hearing more and more about the benefits from having in place proper Corporate Governance processes. It ultimately helps businesses to be run better and to deliver better profits to all stakeholders-that’s shareholders, directors, management, employees and consumers.”
Professor Aung Tun Thet told Myanmar Business Today that small family businesses often encounter difficulties marketing their products, as well as in management and financial support.
“With proper procedures, Myanmar family businesses could grow into major industries, such as the rise of Samsung in Korea.”
Family businesses account for two-thirds of all global companies, while 50-80 percent of jobs in most countries are in family businesses.
Professor Kasper Nielsen, associate professor at the Hong Kong University of Science and Technology, said, “Family business is the prevailing style of business, not just in Burma but the world. The issue is to create a balance between wealth and control and to prepare the succession of the business for sustained success.
“The way to achieve this is for a business and investors is to implement professional corporate governance, including accounting standards and developing a board of directors with relevant expertise.”
About 70 percent of global GDP is produced by family businesses. Family controlled businesses make up 19 percent of the Fortune Global 500 list of companies.
Professor Aung Tun Thet said, “Family business is not a sin. There are many examples of successful family businesses globally. The key to success is ensuring that sound corporate governance in implemented. This will help offer the best of both worlds; maintaining the virtues of family culture and incorporating outside expert advice.”