Changing attitudes towards succession planning are paving the way for more women to take over family businesses or to start up their own companies, according to experts.
The fact women now often enjoy equal rights when it comes to succession and receiving their share of the family wealth may be one of the reasons behind the rising number of female billionaires in the country. The 50 richest women in China own assets worth 23.1 billion yuan (US$3.48 billion) on average, or a combined 1.2 trillion yuan, up almost 50 per cent from last year, according to a Hurun Report issued last month.
The threshold to rank among China’s 50 wealthiest women was 10 billion yuan this year, up nine times from a decade ago.
Yang Huiyan, the 36-year-old vice-chairwoman of property developer Country Garden, with a 56 per cent stake, is the wealthiest woman in the country. Her holding in the company was transferred to her by her father, Yeung Kwok-keung, the founder and chairman.
“In the old days, it was true that boys usually were more in favour than girls in terms of inheriting the wealth of the family,” said Fan Choi, managing director and head of wealth planning North Asia at Union Bancaire Privee, UBP SA Hong Kong Branch.
In those days, a family’s succession plan would typically give 50 per cent more money to sons than daughters, Choi said. She recalled a case from her time as a lawyer in the 1980s when there was a wealthy man who was a Chinese migrant in Malaysia. The man had elected to pass on his wealth to two unrelated boys who came from his village instead of leaving it to his daughter.
The trend has changed in recent years, Choi said. Wealthy families nowadays are tending to treat their sons and daughters equally in succession planning.
“Women have the chance to receive an education nowadays, so they have the same ability and know-how to take over the family business as men. It is getting more and more common for the daughter instead of the son – if she has the passion to run the family business – to take over,” she said.
“If the daughter has married someone the father dislikes, there are cases in which the father adds instructions in his will to prohibit the son-in-law from inheriting any money or assets from the pool.”
She said daughters who took over the family firm usually tended to trade on the heritage of the traditional business while sons were often more inclined to expand into new business lines.
Elsa Pau, principal adviser of P&L Fiduciary Services, who helps families with their estate planning, has also found there are more women inheriting the family business than before.
“There are practical reasons such as the fact many families only have one child. The mainland had adopted a one-child policy for many years before recently changing it. So it is natural that they would pass on wealth and the family business to their only daughters,” Pau said.
Katerine Kou Kuen is the chief executive of Victory Financial Group, a mid-sized Hong Kong brokerage which she took over from her father who cofounded it 46 years ago. She has an older sister who has no interest in running the firm.
Kou has a son and a daughter and has allowed her 27-year old son to join the firm to learn the basics of the business.
“That is nothing to do with gender. My daughter, who studied psychology, has declared clearly she has no interest in financial matters. Rather, my son studied finance and is interested in taking over the family brokerage business,” she said.
Kou’s company also helps other clients to plan for succession, and she has found most allow their children to freely decide whether to join the family business.
“There are some cases where none of the children want to join the family business. In such cases, the parents would usually opt to sell the business to provide cash for their children to do whatever they want to do,” Kou said.
Roger King, director of the Tanoto Center for Asian Family Business and Entrepreneurship Studies, said Chinese companies are still, more often than not, passed on to male members of the family, usually the eldest son.
“However, the family would also support the other sons and daughters in setting up their own businesses,” King said.
China now has the largest number of self-made billionaires, according to last month’s Hurun Report. There were 78 self-made female entrepreneurs worldwide with wealth exceeding US$1 billion each, of whom 49 come from China.