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Why SM’s Sy family opened key company positions to outsiders

The Sy family, the Philippines’ richest family, has opened key positions to outsiders in various family businesses that cover retail, property, and banking.

The conglomerate was founded by patriarch the late Henry Sy Sr., who managed to grow the business into a multibillion-peso enterprise from a corner Shoemart store in Manila in 1958.

One of his children, Hans, however, said that it was not inculcated among them that they would follow natural line of succession in the company’s organizational hierarchy.

“Actually, we have a family constitution and it’s written very clearly that the top position is not really reserved for the next generation,” he said in a panel discussion during the ASEAN Family Business Conference in Makati City on Monday.

Hans previously headed the conglomerate’s property unit SM Prime Holdings Inc., but Jeffrey Lim is now president. Sy currently serves as chairman of the executive committee.

Hans noted the family decided to open its doors to professional, non-family managers to head the various businesses, while the family would operate as owners and advisers.

“We have opened our doors also to professionals, but we would also like them to learn the values of the family. We have CEOs and most of them do understand the values of the family,” he said.

SM Investments Corp., the holding company, is currently headed by Frederic DyBuncio as president and chief executive officer.

Several family members sit on the board of directors with Teresita Sy as vice chairperson, Henry Sy Jr. as vice chairman, and Harley Sy as executive director.

For the third generation Sy, Hans said it will be up to them to prove their worth in taking over the key positions currently occupied by non-relatives.

That has triggered a stepping up of professional skills among the third generation also function as owners, he said.

This year, the second generation Sy siblings were ranked by Forbes as the richest family in the Philippines, the top spot previously held by their father.

The Sy siblings make it to the list for the first time this year, replacing their father Henry Sy Sr., as the new No. 1, a position which the late Sy held for 11 consecutive years. They have a combined net worth of $17.2 billion, stemming largely from the family’s SM group, the country’s largest conglomerate.

SM’s businesses include The SM Store, SM Supermarket, SM Hypermarket, SaveMore, Walter Mart Supermarket, Alfamart, SM Prime Holdings Inc., SM Development Corp., BDO Unibank Inc., and China Banking Corp.

SM Investment posted a net income of P23.0 billion in the first half of 2019, a 27% increase year-on-year on the back of strong contributions from core businesses. —VDS, GMA News