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Saturday October 9, 2010
By TEE LIN SAY firstname.lastname@example.org
Do married couples make good business partners? There are many examples in corporate Malaysia of couples who have built a marriage and business together. Mixing business with pleasure, indeed.
MARRIED to your job. For quite a few in the country’s corporate arena, this rings true in more ways than one. There are many examples of married couples who also manage large corporations as business partners in Malaysia.
In some cases, the co-pilots have together built a thriving business while for others, there have been setbacks from such partnerships.
Some of these business duos in Malaysia, which largely involve family-owned enterprises where husbands and wives are dominant partners include Supermax Corp Bhd’s Datuk Seri Stanley Thai and his wife Datin Seri Cheryl Tan, Crest Builder Holdings Bhd’s Yong Soon Chow and wife Koh Hua Lan, Reliance Pacific Bhd’s Datuk Gan Eng Kwong and his wife Datin Irene Tan, Freight Management Holdings Bhd’s Chew Chong Keat and his wife Gan Siew Yong to name a few.
They are all successful partnerships, but unlike most couples, they face the added and, at times, daunting task of keeping the peace both at home and at work, juggling a meaningful relationship at home with their jet setting careers.
Interestingly though, the principles that apply to these couples both at home and at work do not vary greatly – such as good communication, respect, managing expectations, clearly setting out each other’s roles and responsibilities and so forth.
Of course, that’s easier said than done, and especially so when it involves millions (or billions) of ringgit.
In such business partnerships, probably more so than in others given the conflicts that could potentially arise, it is crucial to have a corporate code of conduct to ensure that there are adequate checks and balances.
Growing a financial partnership
Marriage has many features that are similar to running a business – they both need to be transparent, value adding to both parties, and managed with foresight to be successful.
Like a chief executive officer and a chief financial officer, each partner has precise job functions and should do a job that he or she is most qualified to handle.
A business would certainly run into problems quickly if its CEO did not treat his fellow board members or employees with respect, trust and consideration.
“When an employer treats his employees with respect, he gets in return more than what is expected of them. In the same way, when we regard our spouse with respect, we gain their respect and even more,’’ says NewAsia Capital associate director Sherilyn Foong.
And when the CEO needs to take the day off when he or she’s not well, or for whatever emergency, his or her “next-in-line” should be able to carry on running the business until the CEO can resume duties.
Dr Veerinderjeet Singh, founder and managing director of Taxand Malaysia Sdn Bhd says that there are no issues with husbands and wife working in the same company.
“As both husband and wife are already operating in a company, they are bound by an employment contract, and are fundamentally employees,” he says.
Veerinderjeet adds that if they are also shareholders and have executive appointments, then yes, there is some perception that the shareholder has more control over benefits and remunerations.
“However, we need to remember that the company is managed by a board of directors, and it is not just the husband and wife sitting on this board. They only make up two members, while there could be a total of five board members. So there is some balance there,” he adds.
Furthermore, all remuneration and benefits have to be approved through the proper channels.
But what happens in case of a divorce?
Partner in Messr Khana & Company Dinesh Kanavaji says in the event of a divorce, the same rules apply as in most cases as the parties are still considered employees under the contract.
“There are no special benefits. If the partnership was made after marriage, whatever they earned was a joint effort. Hence both parties have a share to the company,” he says.
Understandably however, staying in the company post-divorce may not be workable.
“A divorce could result in both trying to fight to get the rights of the company. This will lead to problems and may end up in court. The court will then say that one party must buy out the other at market rate. This could lead to even more dissatisfaction and sometimes, could even affect the company,” Dinesh points out.
“If they are shareholders, there may be some issues, as perhaps in the past, they made decisions together, but now that divorced, they make decisions as separate shareholders. There is less cohesion, and this could be detrimental for the company,” says Veerinderjeet.
Are there any tax benefits for couples working together, though?
PricewaterhouseCoopers Taxation Services executive director Phan Wai Kuan says a couple, who are employees or shareholders in the same company, are taxed like all other couples, as separate individuals.
“Each person is assessed to tax on his or her salary or other benefits received in respect of the employment with the company, or income from any other sources, and each being entitled to the same personal reliefs accorded to every individual taxpayer as provided in the law,” says Phan.
However, Phan explains that in a private company controlled by a husband-wife team, there may be more flexibility for making use of opportunities to minimise tax payable by maximising deductions.
“A company controlled in this manner is likely to be subjected to greater scrutiny by the tax authorities, especially with regard to claims for tax deductible expenses. In a public listed company, which is subject to more regulatory control, a husband and wife team would probably not have any obvious advantage in terms of tax savings over others,” she continues.
As we all know, sustaining a marriage is not easy, what more a corporation with so many more people to please ... from regulators, the board, suppliers, customers to shareholders.
Sometimes, one spouse’s career can have big repercussions on the other partner’s career. For example, the wife sacrifices her plans of taking her MBA because her husband is travelling to and from a foreign country as he is in the middle of implementing a huge overseas contract.
The husband needs somebody he can trust to oversee the operations on a daily basis.
“One of the biggest challenges of working with your partner is that you are not able to see eye to eye on all issues. Sometimes you want a certain risk strategy, and she says no. You must agree to disagree,” says SMR Technologies Bhd chairman and CEO Dr Palaniappan Ramanathan Chettiar.
CEO of public relations firm Salina and Associates, Selina Yeop Jr says couples working together can be a bonding factor if both are aligned with a shared objective.
“The challenge is when both parties want to be in the driver’s seat or have differing views or values in terms of how the business is managed,” she explains.
For example, one party has a risk-averse approach while the other is a risk taker. Another form of challenge comes in the form of the couple wanting to compete with each other rather than complement one another.
Palan says it is important to treat each other as equals. “You must respect each other’s expertise and not interfere. Let them run their part of the business.”
Foong says similar traits are needed to make a marriage or a partnership work such as compromise, give and take, tolerance, patience, accepting differences in opinions and thoughts, and not taking issues personally.
Foong points out however, that there are cases where the demarcations of roles are blur.
“For instance, if the husband is the group MD while the wife is executive director and head of business development, then there may be overlaps. Whereas where the husband is CEO while the wife is head of human resource, it’s clear cut on who takes the lead role,” she says.
Investor relations consultancy Aquilas Advisory (Malaysia) Sdn Bhd chief executive Terence Loo says so far, in his experience handling husband and wife teams, there is always a distinct differentiation in the roles played by both parties.
“They don’t overstep each others’ role. One person would take the lead role, and normally that’s the husband,” he adds.
“It is not a great idea to take business issues home. There has to be a work-life balance. Sometimes one person, (usually the husband), is a workaholic, and this affects the marriage. Some of us are very passionate people. Because we love our work, we tend to live our work. This can cause friction,” Palan says.
Palan says when he takes his children for a walk, he has the tendency to bring his Blackberry with him, whereas his wife does not.
Loo says it is quite common for these couples to take their problems home, as there rarely is a clear line between work and personal spheres when couples are trying their best to make the business succeed.
“You tend to take your partner for granted and the anger and irritation is displaced on to your close ones. This is an unconscious defence mechanism. I guess this is part of the marriage package with its pros and cons,” says Palan.
“You must both have your own time. As both partners are seeing each other everyday, in the office and at home, it is important to have your own time and friends. Otherwise, familiarity can breed contempt,” he says.
As such, Foong says the challenges for couples who work together include the ability to separate work and personal lives, as well as maintaining a balance in their own respective lives.
“More often than not, these couples already have a common objective of wanting to make the business work. This provides a strong foundation for them so that when times get rough, they know that they can count on one another to maintain the goal,” Loo says.
An unequal partnership
Partnerships and marriage are, realistically speaking, never 50:50. But husband-wife team at work has several plus points.
When the husband is going through a rough patch at work, the wife becomes his most trusted person, who can honestly tell him what went wrong. Although there may be exceptions to the rule, who else can you trust most, if not your spouse?
“A couple’s sense of ownership and commitment is very strong. They are very willing to sacrifice the short-term pain for the long-term gain,” said Palan.
Nevertheless, he added that they must be ready to listen to professional opinions even if that means overriding a partner’s opinion.
Supermax Corp executive chairman and group MD Datuk Seri Stanley Thai says no one is more trustworthy than one’s spouse especially when facing headwinds and major challenges from time to time.
Loo adds that husband and wife teams have an added advantage in providing emotional support in challenging times. “It is often said that for CEOs, it can get lonely at the top. It isn’t surprising that the wife is often the husband’s trusted confidante in discussing work matters.”
“The main weakness will be sacrificing family life. However, we continue to give the best to our children, through giving them the best education we can afford. We also spend quality time together with the children during school holidays and term breaks,” Thai says.
As the CEO, he makes himself dispensable while he travels around the world in business trips. Thus his wife, the group executive director is able to manage the group while the CEO goes globe-trotting for meetings in overseas distribution centres.
“The spirit of team work is the major contributing factor to our success so far. To date, we have successfully built Supermax group into a size where we are now able to hire the best and most talented employees to our top management team,” Thai says.
Between work and play
Foong adds that it is easier said than done for couples to separate work from their daily lives.
“Even for the more ordinary couple who maintain different jobs at different workplaces, it is difficult. What more for those who work together daily,” she says.
Selina feels that if work is the tie that binds, then it could pose a problem as both their lives revolve around the business.
However, if the couple share other common interests, for example sports or travelling, then a conscientious effort would be made to ensure that a good amount of work-life balance is met.
“It is important for a couple not to depend merely on each other for support, be it professional advice or personal development. Friends can be in a position to provide an objective view to a particular situation,” she says.
Professionally, there has to be proper check and balance in terms of board composition, audit committees and compensation committees.
Foong says some of the successful corporate couples who have built their business empires include companies such as EIG Bhd, Caelygirl Holdings Bhd and Delloyds Ventures Bhd.
Indeed, a successful business is all about relationships.
A question of corporate governance
Married to the job
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