Adrian Cheng’s exit as New World Development’s CEO bodes well for family-linked listed groups

MANY larger Singapore-listed groups count either state investor Temasek or a family as a major shareholder. The holding of a major stake in a listed entity – possibly amounting to a controlling interest – by Temasek or a family affects the entity’s trading liquidity.

Still, small investors can benefit from a listed group having a strong major shareholder. A large shareholder has plenty of skin in the game and much incentive to help ensure a business is well-run and delivers good returns to investors. Also, a focus on growing a company’s dividends helps both the major shareholder as well as small investors.

However, might family-owned groups be less well-managed than Temasek-linked entities because family members hold top executive positions possibly when they are not the best candidates, or occupy such positions for too long?