ECJ joins the club
SMC Chairman and CEO Eduardo “Danding” Cojuangco Jr. has joined the club.
By “Club” I refer to a growing number of self-made billionaires such as John Gokongwei, Henry Sy Sr., Lucio Tan and now Danding Cojuangco who have wisely and strategically chosen to let go of their thrones in the business world. Rather than stay in power and control of the businesses they have long been associated with, all four have either relinquished management or ownership or control of their flagship corporations.
Each of the four undoubtedly have health or personal reasons for letting go, but another reason for giving way is because the business world as we know it has now changed. The core businesses that Sy, Gokongwei, Tan and Cojuangco emerged from have all peaked. What may have been the big business or the promised land of their generation has now leveled off and have become just one of the many business units under their Mega corporations. Gone are the days of “my game-my rules” or one-man rule.
The four patriarchs have clearly realized that today’s business world requires “teams”, technology, a global mind-set, and global investments. In order for their flagships to keep on sailing, the next generation has to be allowed to take control not only of running the companies but setting its sights, mission and vision. To their credit, Sy, Gokongwei, Tan and Cojuangco have been liberal and secure in their stature to let the next generation of leaders to step in and stir their organizations to new areas of investment.
Most prominent among the next generation of leaders have been the sons and daughter of Henry Sy. From Super Malls, SM has ventured into property development, education, resorts and the very latest being the Mall Of Asia Arena.
By giving room to SMC President Ramon Ang, San Miguel has acquired Petron, owns 49% of Philippine Airlines, 33% of Meralco, 46% of the SLEX, is into mining, owns EXXON Mobil gas stations and refinery in Malaysia, SMC has also ventured into airport and LRT operations as well as power generation.
For the Robinsons group, the company has gone from supermarket to owning Cebu Pacific, building and selling Sun cellular, and is now very much into property development. The Lucio Tan group
on the other hand went from tobacco to foods, beverages, property development, schools and hospitals. Another reason why Danding Cojuangco and his fellow “club” members did well to let go is to insure that whatever they built up actually continues to grow, to profit, and survives their lifetime.
Traditionally such changes or turnovers don’t happen unless the patriarch or the chairman of the corporations becomes deathly ill or no longer able to make management or financial decisions. As a result, the corporation, particularly family owned ventures go through hostile disputes for control; business is subjected to predatory attacks of competitors, tax collectors and a train full of legal issues before the dust settles.
In the case of mega corporations such as Robinsons, SM, the LT group and San Miguel Corporation, one major cause for concern has been the potential leadership vacuum affecting corporate stability and profitability. Subsequent to this, any power struggle among owners-heirs or interest groups and shareholders particularly if or where government holds a sizeable share, could lead to a long term turf war that could de-rail the corporations long term business plans and share value.
San Miguel Corporation has particularly been sensitive or subject to legal dispute brought about by government flexing its muscles, by virtue of the shares of stock it controls. In the event that such a vacuum were to happen, the guy in charge of running the business, namely Ramon Ang would be working with one hand tied to his back or constantly checking if he would need someone’s concurrence or approval. With Ramon Ang now in possession of ECJ’s 11 % ownership, Ang can carry on with what top management has set out to do.
Yes, the Patriarchs may have let go of their thrones, but they can still walk around like kings. The problem I have with Presidential trips abroad is that all you ever hear of is what the President did, whom the President met and the investment promises made to him. What we never hear about is all the work the other people in his team did behind the scenes.
Last week I met up with representatives of the garment industry who talked about the President’s visit to the United States last month and about how PNoy made a pitch for President Barack Obama to support the US SAVE ACT which is a bill in the US Congress that could benefit Philippine Garment makers through a joint venture with US Textile millers and garment retailers.
Our US contacts went the extra mile by informing us how Secretary Greg Domingo of the Department of Trade and Industry alongside DFA Secretary Albert del Rosario and DTI Undersecretary Panlilio worked the Congressional offices on Capitol Hill in order to gain much needed support for the proposed US legislation. Sec. Domingo, Sec. Del Rosario and Usec. Panlilio reportedly went through 8 meetings with several important congressmen namely: John Larson (Democrat-CT) a member of the ways and means committee, Trade Subcommittee Chairman Kevin Brady (Republican-TX) as well as being in a meeting with leaders of the US Senate.
Usec Panlilio contributed much to the effort by meeting up with Congresswoman Jenkins (Republican-KS), Adrian Smith (Republican-NE), Ander Crenshaw (Republican-FL) and Gary Ackerman (Democrat-NY).
Aside from showing his full support for the Philippine garments industry, Secretary Domingo along with Usec Panlilio also met with officers of Levi Strauss, Ann Inc, Luen Thai, The American Apparel and Footwear Association and the National Retail Federation (US).
Considering all the work that went into preparing for the trip and having to go through all those meetings in just 2 days, we certainly should give thanks to the DFA and the DTI for trying their best to promote US - Philippine trade relations. Perhaps next time, the people organizing Presidential trips should also make mention of the people who actually do all the hard work. Email: Utalk2ctalk@gmail.com