The rich generation's donation dilemma

Stawa Bill Gates and Warren Buffett charity dinner, in the view of some Chinese tycoons, no less than a wealth of "Hongmenyan."　　Although the "Bobby" has clarified that the dinner does not require a commitment to donate, but in the media amplification, it seems that the rich people already have the impression that the feast is donated "endorsement", virtually already assumed obligations.　　To be sure, such "naked donations" are admirable, and those who prefer to pass on the wealth of the rich have the power to refuse to participate, but the wealthy mainlanders have the same technical challenge: how can their family wealth be passed on safely? An important part of a family's core assets or family value is usually the family business. At the end of the 1990, Arthur Andersen, who was still alive, presided over a family business study, and most respondents said that 60% of family wealth was frozen in businesses, 1/5 of whom said 80% of the family wealth was invested in the business.　　Given the fact that China's pyramid-tipped billionaires are generally entrepreneurial, and the mainland's investment target is relatively limited, their wealth may be more relevant to family firms. As a result, China's entrepreneurial generation must face the reality that the significance of the family business that it now controls is not just an important part of the family's assets, but a successful, robust operation that continues to reap economic rewards is a priority to be considered in the overall heritage plan.　　The transfer of family wealth is not only the transfer of financial resources, but also the transfer of corporate control.　　The ideal situation, of course, is that there are Shensun in the family, cultivate excellent "rich second generation", the realization of property ownership and management rights of the unanimous transfer, however, this good results can not be asked, whether there are many variables, such as the company's maturity, industry competition intensity, as well as the second generation of their own will and ability.　　In China, the special one-child policy has also greatly restricted the selectivity of successors, and, if only an only son, the choice does not exist, if only the Chenglong. If the capacity of the second generation is not enough to directly participate in management, one option is to teach "Fu II" How to Do "club", find a good "shopkeeper".　　In fact, many private entrepreneurs do not expect their children to take over, they logically believe that the size of the family business billions of, enough money to spend a few lifetimes, as long as the transfer of property, the second generation to become shareholders, enjoy dividends, in the form of shareholding with the company to maintain contact can be. However, in the view of Ningxiangdong, executive director of Tsinghua University's Corporate Governance Research Center, this "may not be very reliable", "This separation of ownership and management, still need to refer to a number of social factors, such as mature professional manager market, complete market control mechanism."　　"Ning further explains that this pattern of governance, which prevails in Europe and the United States, is closely related to the high level of market operation and strong institutional investor power, which can make up for the lack of supervision by family members." In China, lack of complete market control mechanism。 As to the question of whether the professional manager is worthy of being entrusted, Gome incident I am afraid to let more business owners began to drum: once the professional managers do not have a sense of belonging to the cause, the proportion of equity is not large, some people will be able to catch up on a little more, or even do not rule out the "big transfer", hollowed out the owner of the company,　　Ningxiangdong personally predicted that this would be a noteworthy phenomenon in the next 20 years. Of course, there is another way to mitigate this, entrusted to the professional asset custodian institutions, by hand to take care of, in foreign countries, this practice is very popular, in the tax avoidance, to meet short-term liquidity needs (foreign genetic inheritance, often to pay a large inheritance tax, so short-term domestic demand for a large amount of liquidity), the realization of equity value, Special provisions set up to provide a lot of help.　　However, at home, this part of the market has just begun, such as China Resources Deep Investment trust is said to be in the development of related trust products. The rich have a more thorough choice, simply the second generation even shareholders do not do, directly sell the company or the company will be listed and then gradually become the stock right, direct inheritance of large wealth, assisted by special trust arrangements, such as, can set "black sheep" clause, the black sheep will abolish the heir rights.　　In the case of individuals, this is a feasible approach, however, if it becomes a group choice, it will depend on a mature asset trading market, a large number of industrial investment funds or PE can be taken over. Behind the institutional dilemmas of these options, there are also many subjective elements that will hamper the inheritance of wealth: for example, some generations are reluctant to discuss the issues of their demise and the impact on their families and businesses;　　Foreign research, for example, suggests that a smooth handover of management and ownership will take 10-20 years, while the majority of Chinese entrepreneurs contacted by Ningxiangdong tend to think it is only 3-5 years away, and a large number of entrepreneurs themselves are unwilling to relinquish control of the company. According to Ningxiangdong, foreign research statistics: in the process of inheritance, about 30%-40% of the family business will encounter failure, in view of the current institutional environment, he believes that the Chinese family business inheritance in the death rate will not be less than 40%.　　It is accompanied by a large number of families of huge wealth of human evaporation. Paradoxically, a small part of China's rich, its own wealth creation process or the current means of operation, is the use of the mainland regulatory system, corporate governance and other areas of immaturity, drilling the loopholes in the system environment, and for the non-family personnel, it is often "used" attitude, ignoring the corporate culture and rational sharing, incentive. In the process of wealth inheritance, they may be surprised to find that if such an environment or practice does not change, the same soil will give birth to its own business "Grave Digger", which is somewhat of a sense of karma.