The 500 largest family businesses in the world generate US$8.02t in revenues and employ 24.5m people worldwide across 47 jurisdictions, high enough to be the third largest national economy by revenue, behind only the US and China saw their revenue grow 10% amidst global slowdown.
These and other findings were published in the 2023 EY and University of St.Gallen Family Business Index, which is ranking the 500 largest family businesses in the world by revenue and is issued every two years.
Longevity and stability continue to be a staple among the companies listed on the 2023 index, as more than three-quarters (76%) have been around for more than 50 years, and nearly one-third (31%) are more than a century old. This is further reinforced by their board structures, with almost one-quarter of all board seats (23%) being held by family members and nearly half (45%) having family members as CEOs.
While most companies in the index are based in Europe (46%), the US is the leading individual jurisdiction (24%). Overall, exactly half of all the businesses in the index are located in Europe, Middle East, India and Africa (EMEIA), with the Americas home to 34% and Asia-Pacific housing 16% of companies in the index. The contribution of Asia-Pacific has been consistently increasing ever since the first edition of the index in 2015, from 12% to 16% this year. Meanwhile, regarding industry sectors, consumer-based family enterprises lead the index (37%) thanks to their dominant share in the Americas. Companies in Advanced Manufacturing and Mobility follow (29%) as this sector is in the lead in EMEIA and Asia-Pacific.
17 family enterprises in Southeast Asia on the list
According to the study, 17 family enterprises in Southeast Asia made it to the top 500 list, including Indonesia (2), Malaysia (4), the Philippines (5), Singapore (2) and Thailand (4). Together, they hire close to 850,000 people, and the average age of board members across these family enterprises is 62 years.
Low Bek Teng, EY Asean Family Enterprise Leader, says:
“Having board members of an average age of 62 years highlights the need for Southeast Asia’s family enterprises to examine board renewal and transition to the younger generation – and this needs to happen within the next few years. As family enterprises grow in size and complexity, a good succession plan becomes an imperative.
“At the same time, the current economic challenges from geopolitical risks, rising inflation and interest rates means that family enterprises may need to take immediate and additional steps to protect the value of their assets and investments. They will need to understand the relevant risks and how each of these risks may impact their businesses. Bringing in the next generation to work and learn alongside the current board and management will help the younger team better appreciate the intricacies of the business.”
