How to Value the Family Shares

Listen to Dr. Lee Oi Kum explain the process by which, in her family business, a yearly valuation was put in place to effectively value shares. It is important to recognize in a family business, that certain conflicts can ultimately foster long-term improvements for the family and for the business.

When we began to sit as a board of directors, it was also a series of learning how to be a good director, besides being ownership. I think there were three important things that we set in part and parcel of corporate governance. One of them is to have yearly valuation – not evaluation – valuation of the company assets. Previously, because there was no valuation, we sort of know what the dividend is, but without knowing the valuation, in our books, everything is at book value. So there was an incident when one of the siblings wanted to sell the shares, and because there was no proper valuation done, it was sort of a cut view figure. But, it did lead to some issues, so usually it’s like that, you know, willing buyer, willing seller but after the transaction is done there will be grouses – why was it like that? Why was it like that? So I think we put in a yearly valuation for internal purpose, but I think it’s a good decision we have made.