Gap in governance of HNW business owners in Asia revealed: study

They are reactive, instead of being proactive.

A survey of High Net Worth (HNW) business owners in Asia, Africa, and the Middle East revealed that these business owners are reactive, and not proactive, in ensuring the professionalism of their management teams and in implementing governance structures that improve the transparency of their businesses.

According to a release from Standard Chartered Private Bank detailing the report it launched in partnership with Campden Wealth Research on the wealth management needs and preferences of High Net Worth (HNW) business owners in Asia, Africa and the Middle East, governance and formal planning are secondary considerations and remain in their infancy; only around half of those surveyed have a formal governance structure in place.

The release noted that the research surveyed stakeholders in family businesses with a 2012 turnover and family net worth in excess of US$100 million, as well as stakeholders in non-family businesses with a 2012 turnover and individual net worth in excess of US$25 million.

Here's more from Standard Chartered Private Bank:

However, the research observed that as businesses mature, professionalisation (including the implementation of world-class best practices in business operations and governance) increases in priority and importance (14 per cent to 23 per cent).

55 per cent of older businesses (>20 years) have a structure in place compared to 50 per cent of younger businesses (<20 years).

These governance structures are likely to be emergent more as a function of business age than any formal planning.