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A case for the family-owned conglomerate
The Ayala name is everywhere in the Philippines, from land and water businesses to telephones and banking. In fact, Ayala companies make up 25 percent of the market capitalization of the Philippine Stock Exchange. Are such conglomerates outdated? Jaime Augusto Zobel de Ayala II, the seventh generation of his family to head the group, doesn't think so. In fact, he believes they are inevitable in emerging markets, where businesses must often diversify to supply and complement existing operations.
The take-away: Family-controlled businesses can offer long-term stability rarely found in a widely owned company, says the CEO of this family conglomerate. But if they expect to raise capital, they must be as transparent as their public counterparts and choose their top managers by merit, not by last names.
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