Entrepreneur Series: Family Governance and Succession Planning

Don’t take legacy and succession planning for granted. That’s the advice of some of the region’s leading family business leaders.

Amassing significant wealth through dedication and hard work has given Theodore Rachmat more than his share of insights into growing wealth. But what does the 12th richest man in Indonesia — and the recent speaker at the HSBC Entrepreneurs Series — say about balancing family succession issues?

For the Chairman of Triputra Group, one of Indonesia’s largest privately held business groups, several things are clear about succession planning, which he confronted himself four years ago.

Ownership is Not Management

His first tip? Prevent family jealousies in the company, through what he calls “complete separation between ownership and management”. Why? “Because if you limit yourself among the family members, it’s only limited talent,” he says. “So instead, choose the best people to run the business.”

Discuss it Now

Rachmat says that when planning his own succession and ownership transition, he brought his children together to discuss his final will, and insisted on an open dialogue. “I said, ’It’s completely transparent, now do you agree with the will? If not, let’s solve this today. If we don’t, I will not be here anymore.’”

Succession is Tough

For former Indonesian Entrepreneur of the Year, Johannes Suriadjaja, the President Director of PT Surya Semesta Internusa Tbk, an Indonesia-based property, construction and hospitality firm, being a business leader actually feels easier than planning a family succession process. He too is presently managing his own succession plan. “I think planning for family succession is tougher,” he says. “Being an entrepreneur is all about having an idea, being willing to take risks, and manage those risks. But if you’re talking about family succession, people are quite complex. You need to read the character of different family members, to really plan the future.”

Family First

For Suriadjaja, formative experiences in his life have given him the conviction that family should always come first. His father had experienced the unexpected loss of his parents at age six, and was raised by his siblings. “So he has also in the same way told me, as the only son, ‘Family is your most important thing’. And whenever you find difficulties in life, you can always go back to the family.”

To learn more about Theodore Rachmat’s hard-fought lessons on business and succession planning, watch him and his son Arif share their unique insights.

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