A_case_for_the_family-owned_conglomerate
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THE
126
McKinseyQuarterly
I N T E RV I E W
A case for the family-owned conglomerate
Ken Gibson
The president and CEO of the Philippines’ largest and most conservative family conglomerate expounds on the value of financial discipline, trust, and good governance in a volatile market.
T
he Philippines would seem to be an unlikely place to find perspec-
tives on management and governance. Hit hard by the 1997 Asian crisis, the country endured two years of fiscal mismanagement and economic decline under the administration of President Joseph Estrada, who was removed from office in January 2001; a heavy depreciation of the currency; and a global slowdown. Most companies in the Philippines have suffered accordingly. Survivors of such economic volatility can offer valuable lessons. Ayala
Corporation has come through the past five years with its businesses and reputation untarnished,1 which is more than many other conglomerates in
Asia can say. Founded as a distillery in 1834, the company soon expanded
1
See Dominic Barton, Roberto Newell, and Gregory Wilson, “Preparing for a financial crisis,” The
McKinsey Quarterly, 2002 Number 2 special edition: Risk and resilience, pp. 78–87
.
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NEIL PACKER
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T H E M c K I N S E Y Q U A R T E R LY 2 0 0 2 N UM B E R 4
128
Generation seven
Jaime Augusto
Zobel de Ayala II
Vital statistics
• Born in Manila, Philippines
• 43 years old
• Married with 3 children
Education
• Graduated in 1981 with economics degree from
Harvard University
• Graduated in 1987 with MBA from Harvard
Business School
Career highlights
• Currently president and CEO, Ayala Corporation
• Currently serves on board of directors for the following
Ayala Corporation subsidiaries, among others:
– Ayala Land (vice chairman)
– Bank of
8/20/02
4:24 PM
Page 126
THE
126
McKinseyQuarterly
I N T E RV I E W
A case for the family-owned conglomerate
Ken Gibson
The president and CEO of the Philippines’ largest and most conservative family conglomerate expounds on the value of financial discipline, trust, and good governance in a volatile market.
T
he Philippines would seem to be an unlikely place to find perspec-
tives on management and governance. Hit hard by the 1997 Asian crisis, the country endured two years of fiscal mismanagement and economic decline under the administration of President Joseph Estrada, who was removed from office in January 2001; a heavy depreciation of the currency; and a global slowdown. Most companies in the Philippines have suffered accordingly. Survivors of such economic volatility can offer valuable lessons. Ayala
Corporation has come through the past five years with its businesses and reputation untarnished,1 which is more than many other conglomerates in
Asia can say. Founded as a distillery in 1834, the company soon expanded
1
See Dominic Barton, Roberto Newell, and Gregory Wilson, “Preparing for a financial crisis,” The
McKinsey Quarterly, 2002 Number 2 special edition: Risk and resilience, pp. 78–87
.
126-137_Q4_Ayala_V5
8/20/02
4:24 PM
Page 127
127
NEIL PACKER
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T H E M c K I N S E Y Q U A R T E R LY 2 0 0 2 N UM B E R 4
128
Generation seven
Jaime Augusto
Zobel de Ayala II
Vital statistics
• Born in Manila, Philippines
• 43 years old
• Married with 3 children
Education
• Graduated in 1981 with economics degree from
Harvard University
• Graduated in 1987 with MBA from Harvard
Business School
Career highlights
• Currently president and CEO, Ayala Corporation
• Currently serves on board of directors for the following
Ayala Corporation subsidiaries, among others:
– Ayala Land (vice chairman)
– Bank of