opinion

Elements of a Flawed Family Constitution

April 20, 2019

If the first quarter of this year was any indication in predicting my governance workload in Asia for the rest of 2019, then I should expect a lot of real, painstaking hard work in the weeks and months ahead. February and March will go down in history as the two months where I was inundated with so many desperate inquiries related to mediating conflict and the desire of families to revisit their “flawed constitutions.”  Flawed Constitutions, completed or otherwise are like botched or bungled procedures in medical jargon. And among the many requests for intervention, some tragic cases stood out primarily because consultants never got these agreements implemented! The toxic cases from other countries are usually pre-screened before it is endorsed to us consultants.  The one that stood out was an unfinished Constitution resulting in tragedy when two family members died as a result of head injuries coming from a car chase instigated by another family member.  The two other cases involving warring siblings and cousins belonging to prominent families in their respective countries. Both are now deep into litigation with both sides trading insults in and out of the courtroom. Clearly these conflicts exposed the deep seated anger and erosion of trust among family members! For the cases coming from the Philippines that are on the verge of a major breakup, they are now locked in a fierce battle for control of the businesses left behind by their parents and founding grandfathers. When litigation lawyers/barristers lead the way, I would usually advice families to kiss the legacy dreams of their deceased founders’ goodbye. My firm’s (Wong + Bernstein) ASEAN governance policy on helping family enterprises are clear, our consultants are discouraged from participating in acrimonious cases where local courts have assumed a certain level of jurisdiction. We only step in as mediators when lawyers officially recuse themselves. What constitutes a “flawed constitution?” First, let’s understand what really a Family Constitution is. Acknowledge Family Business expert and Kellogg School of Management Prof Ivan Lansberg defines it as “a formal document developed collaboratively by family members to encapsulate the values, beliefs and objectives of the family, as a family, with specific reference to the family’s relationship and dealing with its family business.” Secondly, why are there so many defective (completed and uncompleted) constitutions?  Who among the stakeholders are at fault? Is it solely the fault of the family advisor or the reluctance of family members to go through the process? Is it the lack of experience of the advisor and or the lack of emotional commitment of the family members? Can it be attributed to the non-confrontational nature of Asian families, thereby preventing them from addressing the difficult issues? “Flawed constitutions” are a dime a dozen in Asia and the reasons are highlighted below: ·Incompetence of the family business facilitator  ·Adult family members were “forced” to participate because of the growing resentment between generations amongst siblings and or cousins or in-laws.  ·The wrong assumption that with an agreement like a Constitution, long standing acrimony amongst family members can disappear like magic   ·The initiation, formulation and approval phases were all done in a few days, meaning done in haste without getting everyone aligned and committed ·There was no proper orientation or buy in of family members coming from different generations ·There was no activation of the family council immediately right after the signing  ·The family did not bother to proceed with the crafting of the Shareholder’s Agreement  To be continued...  esoriano@wongadvisory.com 

READ MORE
The impressive moments in Bontoc

April 17, 2019

Bontoc, the city in Mountain Province, the Philippines is unique to me. Unique, in the sense that this city makes me impressed. I visited it the first time. Exactly, I arrived in Clark airport on Thursday, April 4, 2019. It was after almost a day from Surabaya on Wednesday, April 3, transit in Singapore, waiting for the flight to Clark on the early morning, 2 a.m. We were the group of my college. Four faculties and 13 students for the student exchange program with Mountain Province State Polytechnic College (MPSPC), Bontoc, Philippines. We spent there for a week. There are many things to express from this city. My group was headed by Dr. Rovila El Maghfiroh, the director of international office in my college. Also, Dr. Muazaroh and Dr. Luciana Spica Almilia joined this visit to MPSPC.  The unique things are not only during the journey but also the programs. From Clark airport to Bontoc takes normally 9 to 10 hours as I heard from a friend there. But, it was different. We were in the group that had to stop several times. First, we stopped in Baguio city after a 5- hour-journey from Clark. We had lunch in a very good restaurant hosted by MPSPC, represented by Dr. Darwin Phillip Alera, a kind faculty accompanying us with his three cars and three drivers, and the crew. After having lunch, we continued the trip to Bontoc. But, we always stopped, to go to the toilet, washing our hands. Due to such several stops, the trip took almost 12 hours. We started at Clark airport at about 9 am, and arrived in Bontoc at 21: 30. It was really a long journey we had ever had. I was so impressed from the start of the journey till the arrival in Bontoc. First, the road is long enough, going up and down through the mountainous regions. This road is – in my opinion— a toll road. I was wondering how the government started building that long road. It is really a very long road. I was wondering how to bring the materials for the road building and how long the road building took.  Some of my friends slept during the journey but I couldn’t. I was so impressed with the drivers who drove the cars. I saw the road was dark because of the fog. And, very especially when it was on the top, the highest peak of the mountain. We arrived in Bontoc, and stayed in Archog hotel at 21: 30 pm. I slept without waking up at that night as I often do in my country. It means that I was so tired but very impressed with the nature. I didn’t dream of anything during a week at night there. But, every time I got up, I always felt as if I were in my own country, Indonesia. Our program of student exchange was stared on the following day, on Thursday, April 5. However, I was so impressed living a week in that city. I was glad to have opportunities to chat with local people in the entire hotel. I was impressed with these friendly people.  I had coffee every early morning in the small kiosk with these people. I was so impressed because they all can speak English well. I was thinking how happy if all my people in my country can speak English like them. They also talked in their local language that I didn’t understand. Yet, when I talked to them in English they could speak in English too. The most impressive was in the Bontoc Mayor office. Dr. Venus Grace K. Fagyan, the Vice President of MPSPC took us to his office. We were welcomed so warmly. We talked with the mayor. We were served  with the hot nice coffee. I am such a coffee addict that it was the most impressive moment.  Dr. Fagyan, the genius faculty I have ever met, was so easily to take us to the Mayor’s office. We entered the mayor office like our own house. There was no formal protocollair. Not only did we get impressed with the warm welcome by the city Mayor, we were also impressed with the programs hosted by MPSPC. I met the college president, Dr.  Rexton F. Chakas and had a chat during a dinner, talking about the college and the faculty duties: teaching, research, and community services. I learned a lot from him. I know how he manages his college: well-managed. The agendas were done based on the quality assurance, with the best system of operating procedures (SOP).  I missed you all. See you again. Dr. Djuwari is one of the group members to visit MPSPC for student and faculty exchange during a week in Bontoc. He is the director of language laboratory at STIE Perbanas Surabaya, the editor of some research journals in the Philippines and Indonesia. He is also a journalist in some newspapers in Indonesia; the president of International association of scholarly publishers, editors, and reviewers (IASPER).

READ MORE
Opportunistic, mudslinging mayoral wannabe

April 17, 2019

  Newport, United Kingdom—Like I said in my previous piece last week, I will try to keep tabs with the ongoing campaign season in Cagayan de Oro City while in the middle of my comfortable vacation here in Great Britain with my husband Ronnie, my daughter Gg, her husband and my grandchildren. And based on the snippets I saw of the debate among mayoral candidates in Cagayan de Oro sponsored by dxIF Bombo Radyo broadcast live over the Facebook page of the City Information Office of Cagayan de Oro City Hall, my expectations and suspicions of Mayor Oscar Moreno's closest rival had been validated and then some. Yes, beneath the nearly patrician features and seemingly harmless veneer lies a first class, opportunistic manipulator who will not hesitate to twist and distort facts and replace it with his own mangled, manufactured version of his truth. Sadly, there will be people who will be fooled by his fake news and hollow charade. They will be lulled into following his grand ambition to sit in City Hall, but in reality he is but a figurehead acting on behalf of an aging relic of a sickly politician desperate to cling to the remnants and memories of his decades-long, iron-fisted rule in the city.  Based on what I saw of the debate and the inputs from my sources in the City of Golden Friendship, this candidate has nothing to offer to Cagayan de Oro City residents other than his barefaced, ambitious, yet ultimately false promises of universal education and modern transportation and whatever he and his inept handlers can copy paste from the internet.                                         ********* Yes, that candidate also promised to revive another of the sickly politician's programs which may be good news to the beneficiaries who had lorded it over vendors during the program's duration. Yet ask the average city resident who complained and were grossly inconvenienced by the traffic congestion and the pollution caused by this so-called populist program and there is a better than average chance that he or she is not alone in their sentiment. In his equally desperate bid for City Hall's top post, this candidate is clearly making a play for votes to anyone who had good memories of this street market/ night cafe and even promised to improve on the concept.  He conveniently forgot that there were already better executed setups of street food courts/stall holders already operating in other cities, provinces and towns across the country like in Cebu City and these were managed by the private sector, not the local government. Yet this fake news producer masquerading as a mayoral candidate won't hesitate to steal an idea, let alone grab credit for projects implemented by others like Mayor Oscar Moreno.                                       ********* I am not alone in my assessment of this ambitious, bare-faced lying mayoral wannabe.  Countless netizens of Cagayan de Oro voiced their displeasure and irritation at mayor wannabe's constant sniping at Moreno, who had to work double time to clarify his good name. As if Mayor Moreno had enough on his hands dealing with mayor wannabe's harangues, he also had to deal with another mayoral candidate who has seen better days. Frankly speaking, his chances of winning are non-existent. My mole told me that mayor wannabe always goes around with hoodlum-looking bodyguards and he always has “assistants”/servants at his beck and call to fetch him his belongings like tissues, cell phones and even the megaphone he uses during his campaign sorties. Is that the kind of mayor that Cagayan de Oro City residents deserve? I hope and pray that city residents reject this pretentious, ambitious, opportunistic, mudslinger and vote for Moreno and his allies in the City Council.

READ MORE
Some political notes this Lenten break

April 17, 2019

PRESIDENT Duterte’s no. 1 nemesis,  Sen. Antonio Trillanes IV is a political idiot like no other.  He throws rubbish exposes and nonsense political grandstanding  delivered in the halls of Congress with nothing but a waste of people’s money. With his swollen balls, Trillanes   continues to attack the President  by accusing him of various anomalies, none of which could satisfy a public outcry that could lead to a coup d’etat, or military takeover. Another good for nothing senator  is Riza Hontiveros.   Her constant attacks against Duterte’s drug war  is a monotonous media hype,  as if it has done nothing good at all for the country. Agot Isidro, a self-styled celebrity has called the President a psychopath.   Likewise,  Jim Paredes, who got the ire of not sitting beside an airline co-passenger wearing a DU30 shirt never said anything good for the President.   His latest social media exposure doing something to satisfy his earthly desire speaks for his true persona – dirty old man masquerading as forerunner of his own understanding of morality and good governance.  Agot and Paredes  continue to exercise their constitutional right to be the nations’  leading idiots and enjoyed their freedom to be stupid. Detained Senator and sex-starved De Lima  had  claimed to be the fiercest political enemy of the President.  Calling the President a cold blood killer of his own people, De Lima hurled insults against Duterte and accused him of being behind the EJK’s in the country. De Lima enjoys by  her lonesome at the PNP Custodial Center for drug charges but continues to badmouth the President even behind bars.               And here comes the religious sector which has been using school  children to mock and ridicule the President carrying placards with words like murderer, plunderer, corrupt   --  a display of arrogance and defiance. This so-called bastion of Christianity have the balls  to brand the Duterte administration as immoral. Even to the extent of praying to high heavens for Duterte’s  downfall.   They keep on ringing   church bells as if this country is possessed with evil spirits.   Those who plan to oust the President clearly undermines the will of the majority of the Filipino people. Such act threatens the very foundation of democracy for which our country is built upon.  The writings   on the wall are very clear.     Is  the country  heading toward a dictatorship akin to that of the Marcos regime? Obviously, this allegation is not shared by the overwhelming majority of the Filipinos. Duterte still  enjoys an approval rating of 84 percent with less than 10 percent dissatisfied.    What is going on in this country is the Yellow’s  grand design to oust a Mindanaoan President.   To all the political nemesis  of Duterte,  good luck. And to all psychopaths and misfits in government, your days are numbered. (ruffy44_ph2000@yahoo.com)

READ MORE
Navigating the Perfect Storm Last Part

April 15, 2019

The biggest differentiator between families that last and those that fall apart is open, honest, transparent communication and that means getting into the challenging governance process of managing the emotional overlaps starting with the family, business and ownership ecosystem. Notwithstanding that a family enterprise, by definition, is one where there is an intention of keeping control within the family, the challenges of successfully perpetuating a family business remains to be a daunting task for family members. The most important hurdle is overcoming the saying that “wealth only lasts for three generations.” I am sharing part two of last week’s article: 3) Make an honest and realistic assessment of your gene (family) pool You may want your first-born son to run the business, but does he have the commitment or even the interest to do it? Is he passionate and have the requisite skills to grow the enterprise? The key is evaluating the strengths of all possible successors and not just the first born offspring. Whatever the outcome, it is important to continuously recruit the best professional talents so that in the event a key business leader dies or becomes incapacitated or the successor underperforms and falters, the business will not be compromised.   4) Fair is equal, equal is never fair. Equal shares in the Business is discouraged While equality is a nice idea in theory, it may not be in the best interests of the business. It may be better for the successor that has been chosen to have a larger share of business ownership than other family members who are not active in the business. Another possible option that you can incorporate in the shareholder’s agreement is to impose voting rights for family shareholders who are active and non-voting rights for those not active. 5) Institutionalize a Family Training Office for successors and next generation members Quoting our training partner in Asia, Excellence in Education (ExcED), and “if you think education is expensive, try ignorance!” How can you expect the next generation members to take over and run your business successfully if you haven't spent any investment in educating him or her on the rudiments of leadership and management? These two interventions will propel the growth of the business. 6) Get Professionals to Implement the Succession Plan A qualified family business coach can guide the family business in the succession process. Our firm has even created a dedicated team comprising former senior executives to take the lead in helping operationalize a successful succession plan. If the intention is to handover your family business to the next generation, putting off business succession planning is the worst thing you can do. A good succession plan can ensure that shared family and business vision and values are aligned. 7) Choosing a Non-Family Professional as Successor When family members are not qualified or too young to assume a sensitive position, the leader can explore other options like hiring a non-family professional to assume the mantle of leadership while mentoring the next generation members. Business owners should learn from Stan Shih. As founder and CEO of global giant Acer Computers, Shih not only prohibited his family from joining in the business, but passed the top position in 2005 to a veteran executive who had helped Acer establish its brand in Europe. This move won praise from suppliers, customers and investors alike, enhancing Acer's reputation in the highly competitive tech market. Shih declared “only when our business, including our own, is managed by the most professional and competent managers can we create higher value for ourselves and our shareholders.” esoriano@wongadvisory.com 

READ MORE
Look who’s talking?

April 14, 2019

HERE we go again. The U.S. is quick in the draw of issuing travel advisory, placing the entire country at a Level 2 status and warned Americans not to travel to Mindanao due to ‘terrorism, civil unrest and kidnapping’. Now, look who’s talking.  The Americans under Trump are again throwing their dirty linens in this ‘poor’ country to cover up their ineptitude of protecting their own people.  Americans are fond of playing guessing games and have no second thoughts whatsoever  of securing its citizenry out of harm’s way. Their crime stats say it all. What  makes so alarming  is the tagging itself.  Their penchant of labeling the PH as a terrorist haven -- not realizing so well that their own country has more than enough terroristic activities year in and year out – is itself a deafening statement that mirrors their lack of discernment,  diplomatic respect and  proper decorum.  With no basis at all, the U.S. Embassy took no time in disseminating information to its citizens to consider travel plans carefully and at the same time exercise heightened vigilance when traveling to Mindanao. That said, it’s not  fun at all to receive this travel bulletin  sourced out from nowhere. The Americans are experts on this,  and  it’s a classic case of adding insult to injury. And most often than not,   it draws negative impact as to the capability of our  intelligence community to gather “credible information” before events get out of hand. The reversal of the issuance of travel warnings could be possible if only our government, this current administration in particular, is hell bent on changing the rules of the game.                                                         Maybe the key word here is doing the right thing of being proactive rather than the usually reactive mode. Case in point: After the U.S. announcement, government functionaries immediately reacted and put up “security measures” for the people to take note. A reactionary statement such as this: “Taking all reports seriously, keeping monitoring and vigilance in place and vigilance, taking all necessary precautions “ is overly abused, even to the extent of becoming irrelevant, and worse deafening to the ordinary ears. We often hear this after the travel advisory : ‘Citizens are advised to carefully consider this travel advisory as you make your travel plans.  A review of personal security plan to include the avoidance of large crowds and gatherings is highly advised. Please remain vigilant at all times.’ And this is much deafening to the ears: ‘Security tightened amid U.S. travel alert’. To play second fiddle on intelligence gathering places this country in a dismal situation in the eyes of the global community.   (ruffy44_ph2000@yahoo.com)

READ MORE

Subscribe Now!

Receive email updates from Mindanao Daily News.