One of the events I attended last week, of AF Hospitality (AFH) and the Araneta-Fores family, had me pondering on the issue of succession, and perpetuating legacy, in this country.

If one were to use royalty as the metaphor, the event I attended was in essence, a “coronation.” As the son of legendary culinary icon, the late Margarita Fores; this was Amado Fores ascending to be CEO of an AFH that was now subsuming a number of the brands his mother had founded, and being made the president and CEO of CIBO — which had been founded by Margarita, and was being run with her brother and sisters in executive roles.

Speaking of generational succession; a first cousin of Amado, Mercedes Fores, was ascending to take on the role of CIBO Chief Operating Officer (COO), a role previously occupied by a non-family member professional, Edgar Caper. Caper, was moving up to be one of the managing directors. It may have been precipitated by Margarita’s untimely passing, but here was their version of the “changing of the guard.” What was nice to observe was the united front the family, across two generations, were displaying — rallying around the expanded role being placed on the shoulders of 33-year old Amado.

It was honoring the memory and legacy of Margarita, and ensuring her wishes come to fruition; while ensuring that the legacy endures, and even grows further.

Responsible and effective succession is something that all corporations, even families, have to face and plan for, as time passes. And I would venture to say it may not always be that easy as we think — or as clear cut from what we witness, when the formal announcements are being made, as these are “fait accompli’s.”

I say this because it’s often the case that if on one side you have arrayed competence, experience, tenure, and professionalism; positioned on the other side, are factors such as human nature, seniority, sense of entitlement, and petty jealousies. Whether we’re talking families, or corporations controlled by a founder and his family; it’s not a given that the gap between the two sides can be amicably resolved — especially when one is talking about big money. And do keep in mind that the more money we’re talking about, the more the stakes and blood pressure are raised. Our thinking, as regular folks, that it’s more money than one could even spend in a lifetime, doesn’t come into play at those levels of income generation and consumption.

A cursory look at the conglomerates of today, the ones that have prospered for more than a century, and you’ll often find a charter that spells out succession. And there’ll be a formal family council. Training the next generation — not forcing individuals, but taking the time to see which young family members are capable of taking on corporate roles — are all part of the “game plan.” With these companies, there’s a deep respect for the professionals (non-family members), who have contributed to the conglomerate’s growth.

Often, these are publicly listed companies; so trust, integrity, and preserving or increasing stock value are paramount. Witness how carefully Ayala Corporation announced the roles of their Next Gen triumvirate — Jaime Z. Urquijo, Mariana Zobel-Aboitiz, and Jaime Alfonso Zobel. The third generation Sy’s have risen through the ranks, with a number now holding key positions in the different SMIC companies.

With big families such as the Zobels de Ayala, Sy’s and Aboitiz, it’s interesting to note how it’s never automatic that the children or grandchildren will be working for the companies. They need to earn their “stripes,” and you’ll find several who pursue their own dreams outside the conglomerate. They may own blocks of shares of the company, but won’t be involved in the running of it.

There’s danger when principles of meritocracy are ignored; when offspring are put in charge even when they don’t possess the aptitude. Some are born to be leaders, some are visionaries, and some are good administrators; it’s often a matter of taking the time to find their strengths — and that’s not an overnight process.

I mention this because just recently I met the CEO of a prominent company. It’s Chinoy owned, and when I met the female CEO, I was surprised to discover that she’s the youngest of five children, and the only girl. The patriarch founder is still alive; and not for anything, but I became curious about how that turnover was arrived at — as it flies in the face of so many things we hear about embedded Filipino-Chinese traditions.

Succession with merit is the key; and when I was talking about this among friends, mention was made of how if you made a roll call of the big players of the Philippine stock market just 40 years ago, you’ll find that quite a number have cashed in, are no longer leading their respective industries, or have simply diminished in stature. Yes, the current generation of these families are still loaded, but the corporations they are identified with are no longer spoken of with awe — a lesson to absorb when talking succession.