Family Business Survey 2018 - PwC Business Survey 2018 –Indonesia results 2 1. Subject Page 2....

Family Business Survey 2018Indonesia Report

PwC

Report Contents

Family Business Survey 2018 – Indonesia results

2

1. Subject Page

2. Background to the FBS 2018 survey 3

3. Profile of businesses interviewed in Indonesia 5

4. Headline findings in Indonesia 8

5. Main findings:

6. Organisation performance 10

7. Organisation challenges 15

8. Family involvement and succession planning 22

9. Values > Purpose > Impact > Legacy 30

10. Gender equality 39

11. Appendix: Profile of businesses interviewed globally 41

PwC

About the Family Business Survey

3

The Family Business Survey is a global market survey among key decision makers in family businesses within a number of

PwC’s key territories. The goal of the survey is to get an understanding of what family businesses are thinking on the key

issues of the day.

Interviews conducted

between 20 April and

10 August 2018

2953Semi-structured

interviews conducted

with key decision

makers in family

businesses with a

sales turnover of

$5m+

Across 53countries

Interviews averaging

35 minutes primarily

conducted by

telephone in local

language. Some also

conducted via an

online survey or PwC

led face-to-face

interviews

54 interviews were conducted in Indonesia in this periodFamily Business Survey 2018 – Indonesia results

PwC

2953 interviews conducted in 53 countries


4

Poland = 43

Romania = 59

Russia = 30

Eastern Europe

Austria = 44

Belgium = 64

Denmark = 40

Finland = 68

France = 36

Germany = 171

Greece = 32

Ireland = 129

Italy = 131

Liechtenstein = 1

Luxembourg = 1

Malta = 54

Netherlands = 74

Portugal = 16

Spain = 58

Sweden = 78

Switzerland = 108

Turkey = 54

UK = 130

Western Europe

Canada = 94

USA = 168

North America

Brazil = 163

Colombia = 50

Ecuador = 60

Mexico = 81

Latin America

Australia = 69

Bangladesh = 32

China = 52

Hong Kong = 56

India = 106

Indonesia = 54

Japan = 131

Malaysia = 40

Myanmar = 1

New Zealand = 1

Papua New Guinea = 31

Philippines = 18

Singapore = 38

Taiwan = 69

Vietnam = 2

Asia and Pacific

Middle East = 32 Kenya = 46

Nigeria = 30

South Africa = 108

Middle East and Africa

(Egypt, Jordan, Lebanon, Oman,

Saudi Arabia, Syria, UAE)

PwC

Indonesia company profile – what companies were included?


5

%

Turnover (sales) (US$) Number of Generations

* Sector (2018)

Base: all Indonesia respondents (2018: all answering n=54; 2016: n=36)

Other sectors: 4% or less

11 19

1314

11 8

13 6

1517

76

919

2018 2016

$1bn+

$501m-$1bn

$101-500m

$51-100m

$21-50m

$11-20m

$10m and under

Family’s Role in the Business

85

15

Own and manage

Just own, don'tmanage

89

11

2018

2016

* Question changed from 2016 meaning comparisons not possible

37 31

35 50

15 114 3

2018 2016

4+ generations

3 generations

2 generations

1 generation

22

9

7

7

6

6

Manufacturing

Energy, utilities & mining

Food & drink (manufacturing)

Real estate & renting

Agriculture

Financial services

PwC

44% of Indonesian family businesses from the 2018 survey have one dominant owner


6

44 47 46 49

611

4 522

19 28 279

8 6 526 8 8178 6 5

2018 2016 2018 2016

Other

Extended family (30+)

Several cousins

Siblings

Spouse and/or in-law

One dominant owner

A further 22% have siblings as owners. Around 10% have ownership shared between cousins or an extended family.

Family ownership structure

%

Indonesia Global

S8. And which one of the following best describes the family ownership structure of your business?

Base: all respondents answering (2018: Indonesia=54, Global=2820; 2016: Indonesia=36, Global=2802)

PwC

Indonesia respondent profile – who did we talk to?


7

%

* Current Job Role / Position Age

Family member

1533

4833

26 28

7 34 3

2018 2016

65 or older

55-64

45-54

35-44

Under 35

Gender

56

50

22

56

61

13

Owner

CEO / MD

Chair

On Management Team

On Board of Directors

Other role / position

80 81

20 19

2018 2016

Non-family member

Family member80 89 90

13 11 10

2018 2016 2014

Female

Male


Base: all Indonesia respondents (2018: n=54; 2016: n=36)

PwC

Headline findings for Indonesia


8

Growth among Indonesian family businesses over the last 12 months has increased compared with those

answering in 2016. 65% have seen growth (vs. 42% in 2016), including 35% who have seen double digit

growth. Only 7% have seen a sales reduction (down from 44% of those asked in 2016). Globally, 69% of

family businesses grew. 87% of Indonesian family businesses expect to grow over the next two years.

Businesses in Indonesia are more likely to say growth will be quick and aggressive (39% vs. 16% globally).

International sales currently account for 16% of Indonesian family business turnover and is predicted to

account for 27% in five years’ time.

1

Half say they have a formal mid-term strategic plan in place. 17% have no plan. More than a third (35%) of

Indonesian family businesses expect to change their business model over the next two years (vs. 20%

globally) and 81% say they will bring in professional expertise from outside the family. There is a lower level

of diversification in Indonesia than average with only 19% operating in multiple sectors and markets (the

global average is 26%) and this level is lower than that recorded in 2016 in Indonesia.

3

Key challenges for Indonesian family businesses in the next two years are access to the right skills and

capabilities, the need to innovate in order to keep ahead, the economic environment and competition. In

terms of important personal and business goals, the maintenance of the best talent (via recruitment and

retention) for the business is crucial (89% cite this). Innovation and profitability are also key.

2

PwC

Headline findings for Indonesia


9

13% of businesses have a robust, documented and communicated succession plan in place (similar to the

global average of 15%). 81% of family businesses in Indonesia plan to pass on management and/or

ownership to the next generation. However a third (30%) have not involved the next generation in

preparations for these changes and only 57% currently have next gen working in the business.

5

63% of Indonesian family businesses feel they will have made significant steps in terms of digital capabilities

in the next two years. 46% of businesses feel vulnerable to digital disruption (more than twice as many as in

2016, and higher than the 30% citing this globally). A third (31%) feel that they are vulnerable to a cyber-

attack (less than the 40% globally who feel vulnerable).

4

72% of Indonesian family businesses have a clear sense of agreed values and purpose as a company,

although only half have these values or a company mission in a written format. It is felt that such values

benefit the company; notably in terms of the bottom line with more than seven in 10 agreeing that values

and purpose have created a competitive advantage or increased revenue and profitability.

6

Women average 24% of board members in Indonesian family businesses (vs. a global average of 21%) and

27% of people on the management team (24% globally).7

Organisation performance

This section provides an overview of growth, how growth is financed and diversification

PwC

Growth among Indonesian family businesses over the last 12 months has increased hugely (when compared with those answering in 2016).


11

87% expect to grow over the next two yearsfindings for Indonesia

7

44

920

65

42

69 64

2018 2016 2018 2016

Salesgrowth

Salesreduction

Base: all respondents answering (2018: Indonesia=54, Global=2950/2951; 2016: Indonesia=36, Global=2802)

Growth in last financial year

Q1a. Looking back over the last financial year would you say your sales have…?

Q1b. Which of the following best describes your aims for growth over the next two years?

Growth aims over the next two years

%

Double digit growth: 35%Single digit growth: 30%

In 2016, 88% of businesses in Indonesia and 85% of Global

businesses expected to grow over the next five years

Double digit growth: 34%Single digit growth: 35%

713

48

68

39

16

Indonesia Global

Grow quickly andaggressively

Grow steadily

Consolidate

Shrink

Indonesia Global

87% 84% Expect growth

PwC

63% of family businesses in Indonesia currently export their goods or services (down from 81% in 2016), now lower than the global average


12

80 7986

78

Indonesia Global

2018

2016

6370

81

70

Indonesia Global

2018

2016

Any current international sales Any future international sales (five years’ time)

%

On average, foreign sales accounts for 16% of

turnover in Indonesia. This average includes all

businesses (even those not exporting at all).

On average, it is estimated that foreign sales will

account for 27% of turnover in Indonesia in five years’

time. Again, this average includes all businesses (even

those expecting that they won’t be exporting at all in

five years’ time).

Q28a. Approximately what percentage of your sales comes from exporting or selling goods and / or services in foreign countries at the moment?

Q28b. And approximately what percentage of your sales do you think will come from exporting or selling goods and / or services to foreign countries in 5 years’ time?


PwC

Bank credit and internal resources are mostly used to fund the business Branding updates - refereshed PwC branding


13

Almost half of Indonesian FBs would consider bringing listing on a stock exchange or placing shares with chosen

institutions

Actions would consider to help fund the business

%

Base: all respondents answering (2018: Indonesia=54, Global=2887-2946)

Q14p. Which of the following sources, if any, do you currently use to help fund the business?

Q14q. And which of the following sources, if any, do you think you will start to use to help fund the business over the next 1-2 years?

Q14r. And which of the following, if any, would you consider to help fund the business?

Q14s. And which of those is the most attractive?

78

72

24

20

19

7

2

17

24

20

Bank lending /credit lines

Internal resources

Venture capital

Capital markets

Stock market

Currentlyuse

Will startto use

48

35

22

39

22

9

Listing all or part of the business on a stock

exchange or placing shares with chosen institutions

Bringing in private equity

Bringing in other families or family offices

Would consider

Most attractive

Sources used / will use to help fund the business

Global

‘currently use’

81%

71%

16%

15%

10%

Global

‘would consider’

26%

39%

20%

PwC

19% of Indonesian businesses work in multiple sectors and multiple countries, compared with 26% globally. There is a lower level of diversification than in 2016.


14

S7. Which one of the following statements do you think best describes how diversified your business is?

%

Family businesses diversification

33 28 30 30

2825 20 20

20

824 25

19

3926 25

2018 2016 2018 2016

Multi sector, multi country

One sector, multi country

Multi sector, one country

One sector, one country

Indonesia Global

Organisation Challenges

This section provides an overview of the challenges facing businesses over the next two years, whether business have a strategic plan in place for the next 3-5 years.

PwC

Accessing skills & capabilities, innovation, the economic environment and competition are the key challenges faced by Indonesian family businesses


16

76

74

70

70

63

61

57

54

54

52

48

41

37

35

35

33

26

9

Accessing the right skills & capabilities

The need to innovate to keep ahead

Economic environment

Domestic competition

International competition

Regulation

Professionalisation of the business

Prices of energy & raw materials

Corruption in the countries where you operate

Digitalisation

Data management

Succession

Access to financing

Cybersecurity

International tax reform

Conflict between family members

The growth of artificial intelligence/robotics

The UK's decision to leave the EU

Key challenges over the next two years (Top 2)

%

Q3a. I’m going to read out a number of factors and

I’d like you to tell me how much of a challenge you

think each one will be for your business over the

next two years on a scale of 1-5, where 1 means it

will be a minor challenge or not particularly

important and 5 means it’s going to be a major

challenge for your business

Base: all respondents answering (2018:

Indonesia=54, Global=2950-2952)

Similar hierarchy in 2016 (for next five years)

Global

60%

66%

56%

49%

38%

43%

41%

43%

23%

44%

39%

33%

25%

39%

16%

14%

22%

11%

PwC

Attracting/retaining talent, being more innovative and improving profitability are the key personal / business goals for the next two years


17

Important personal & business goals (Top 2)

%

Q3b. I will now read out some potential personal

and business goals. I would like you rate each

goal on a scale of 1-5 where 1 means it’s not

important to you over the next two years and 5

means it’s essential to you over the next two

years.

89

89

89

85

78

72

70

69

54

52

To attract & retain the best talent for the business

To be more innovative

To improve profitability

To professionalise the business

To offer a compelling reward system for employees

To diversify

To achieve a work-life balance

To contribute to the community and leave a positive legacy

To internationalise

To promote diversity

Global

87%

73%

80%

64%

62%

44%

58%

60%

37%

45%

Base: all respondents answering (2018:

Indonesia=54, Global=2949-2950)

PwC

63% think they will have stepped up digital capability in the next two years. 81% will bring in external expertise; much higher than the global average


18

Likely true of business in 2 years (Top 2)

%

Half expect to be exporting to new countries and more than two-fifths think they will be earning the majority of revenue from

new products or services; both higher than the global average.

Q2. Thinking about the business in 2 years’ time, realistically how

likely is it that the following statements will be true of your

business? Please use a scale from 1 to 5 where 1 is not at all

likely and 5 is very likely.

81

63

50

44

35

31

28

Will have brought in experienced professionals fromoutside the family to help run it

Will have made significant steps in terms of digitalcapabilities

Will be selling its goods or services in new countries

Will earn the majority of its revenues from newproducts or services

Will have significantly changed its business model

Will have been involved in buying or merging withother domestic companies

Will have been involved in buying or merging withother companies outside of its domestic market

Global

53%

57%

38%

18%

20%

24%

18%


PwC

Far more businesses feel vulnerable to digital disruption (46%) than in 2016 (higher than the global average). 31% feel vulnerable to a cyber-attack (lower than the global average)


19

Business vulnerability to a cyber-attack

%

Q10a. To what extent do you feel your business is vulnerable to digital disruption? Would you say...

Q10d. And to what extent do you feel your business is vulnerable to a cyber-attack? Would you say...


Business vulnerability to digital disruption

Indonesia Global

13 9

5450

20 33

11 7

2018 2018

Very vulnerable

Fairly vulnerable

Not very vulnerable

Not at all vulnerable

46% 19% 30% 24% 31% 40% Vulnerable

Indonesia Global

1125

1728

41

5651

47

35

1424

2111 6 6 4

2018 2016 2018 2016

PwC

When respondents globally were asked about the threat from digital disruption only a minority were able to talk about specific technologies. The threat tended to be seen as challenging their existing business model


20

Competition could come from a wide range of sources

• Large multinationals – challenging the way they sell their

products and the supply chain (e.g. Amazon, Google)

• New entrants (large or small) with the skills and funding to

disrupt the market and be digital from the outset (e.g. fintech,

the next ‘Uber’, Google in construction)

• Seen as hard to keep up and/or stay ahead

• Owning the data also seen as key

Consumer behaviour is changing

• Increasing move to e-commerce

• Fear an increasingly price led market place will devalue the

traditional strengths of FBs

• Most mentions of Artificial Intelligence

• Small numbers of mentions of Blockchain, Big Data, machine

learning, 3D Printing, driverless cars

• Tends to be raised as a competitive threat although some

talk of the impact on jobs

• More likely to talk about as a threat than an opportunity –

although some see as a means of getting ahead

• Again, challenges in keeping up; having the right skills set,

leadership skills and investment

General threat from competitors – current or yet to emerge

Threat (or opportunity) from specific technologies

A sizeable proportion interpret digital disruption to be security

threat

• Mentions of significant fears over cyber security, vulnerability

to cyber crime, reputational threats from social media,

banking fraud and/or systems outages

Others have a more general fear of being left behind but lack

the ability to get ahead

• The business or the family remain traditional in their outlook

Uncertainty/lack of understanding of the threat

“4G industrial revolution on manufacturing shop floor”

(Indonesia)

“Online E-Commerce as this allows the market to have

excess to goods that initially couldn't have been sourced,

readily available and cheap. Our business model

comprises 60% of distribution and with global E-

Commerce our margins are hit.” (Indonesia)

“Because the company is in the IT field so it is vulnerable

to cyber interference, for example in communication via

the internet. Now everything is digitalised, online

businesses are vulnerable because they cannot be 100%

protected.” (Indonesia)

Q10b. In what ways do you think you are vulnerable to digital disruption? Which technologies in particular? Open ended question

Answers tended to fall into three camps – global findings

PwC

Half say they have a costed, formalised and documented mid-term plan. 17% have no plan at all (somewhat lower than the global average)


21

%

Have a strategic plan for the next 3-5 years

50

33

17

49

30

21

Have a costed, formalisedand documented plan

Have a plan - but not costed,formalised and documented

No planIndonesia

Global

Say the plan is embedded in their financial planning process

(83% Global)80%

Among those with any sort of plan…

Say the plan has defined financial and non-financial KPIs in place

to measure the progress and success of the plan (65% Global)56%

20% have just financial KPIs and 2% have just non-financial KPIs.

22% have no KPIs

Have communicated the plan internally

(82% Global)87%

Have communicated the plan externally

(53% Global)60%

Q4. Does your company have a strategic plan for the next 3-5 years? Q6. Has this strategic plan been fully costed, formalised and documented?

Q7. Do you have defined financial and / or non-financial Key Performance Indicators (KPIs) in place to measure progress and success of this strategic plan?

Q8a. Is the strategic plan embedded in your financial planning process? Q8b. And has this strategic plan been communicated…

Base: all respondents/all with a strategic plan answering (2018: Indonesia=54/45, Global=2952/2327-2331)

Family involvement and succession planning

This section provides an overview of next generation involvement and issues, spouses working in the business, succession and future plans for the business.

PwC

Only 44% of Indonesian family businesses allow spouses/partners to work in the business; a similar proportion can own shares, while 37% can take up governance roles


23

Family and spousal involvement in business

%

Q11b. Are other family members/family members allowed to work

in the business?

Q11c. In principle are partners or spouses of the family…?

Q11e. Are partners or spouses allowed to take up any roles in the

family governance?


81

44

43

37

89

64

42

50

Allow family members towork in the business

Allow spouses/partners towork in the business

Allow spouses/partners toown shares in the business

Allow spouses/partners totake up roles in family governance

Indonesia

Global

PwC

57% of Indonesian family businesses have next generation family members working in the business


24

Q12a. Are there any next generation family members involved

in the business who are…?

Base: all respondents (2018: Indonesia=54, Global=2953)

Involvement of next generation in business

%

33

30

26

28

24

17

13

4

43

37

36

31

29

15

24

2

On the leadership team

On the Board of Directors

Senior Executives

Working in the business but not in a senior role

Not working in the business but who are shareholders

Engaged in Family Office

Engaged in philanthropic activities

Involved in some other wayIndonesia

Global

57% of Next Gen

work in the business

(65% Global)

PwC

Next gen working in the business are largely expected to gain internal and external experience, but only a third are expected to be just as suitable for the role as non-family members (vs. 65% globally)


25

Q12b. Generally speaking, are next generation family members

working in the business expected or encouraged to…?

Base: all respondents with next gen working in the business answering

(2018: Indonesia=31, Global=1903)

Expectations for next gen family workers

%

71

68

52

39

35

23

69

76

50

59

65

34

Gain experience outside of the family business

Gain experience from inside the family business

Have specific foreign language skills

Graduate from a business school

Fulfil the official job specification i.e. be just assuitable for the role as non-family members

Apply for roles through the official recruitment processIndonesia

Global

PwC

74% of Indonesian family businesses have some form of policy/procedure in place within the business, lower than the global average


26

Q13. Which of the following policies and procedures, if any, do

you have in place?

Base: all respondents answering (2018: Indonesia=54, Global=2946)

Policies and procedures in place

%

46

30

26

22

20

20

15

13

9

26

32

56

27

26

35

30

24

42

36

16

Family council

Shareholders agreement

Family constitution or protocol

Pre-nuptial arrangements

Entry and exit provision

Conflict resolution mechanisms

Third party mediator

Testament/last will

Emergency & contingency procedures

None of these

Indonesia

Global

74% have some form

of policy / procedure in

place within the business

(84% Global)

PwC

54% claim that family conflict is handled within the immediate family or discussed openly by the family, but one in five ignore conflict because of societal norms


27

Q19a. Which of the following (if any) describe how family

conflict is handled in the company?


%

54

54

20

13

7

11

63

54

9

14

7

17

Conflict is handled within the immediate family

Conflict is discussed openly by the family

Ignore conflict because of societal norms

Use a third-party conflict resolution service

Other approaches

Not applicable / No conflict has occurred

Indonesia

Global

Approaches use to handle family conflict

PwC

13% of Indonesian family businesses have a robust, formalised and communicated succession plan in place (similar to the global average of 15%)


28

Q14a. Does your company have a succession plan in place?

Q14b. Is this succession plan robust, documented and

communicated or is it less formal than that?

Base: all respondents answering (2018: Indonesia=54, Global=2951/1507)

Have a succession plan in place?

%

13

39

35

13

15

34

44

7

Have robust, formalised andcommunicated plan

Have a plan -but less formal

No plan in place

Don't knowIndonesia

Global

(14% in 2016)

(15% in 2016)

PwC

81% plan to pass on management and/or leadership onto the next generation. 30% of those planning to pass onto the next gen have not involved the next gen in these plans% of Indonesian family businesses have a robust, formalised and communicated succession plan in place (similar to the global average of 15%)


29

Passing on management / ownership to the next generation? When will this occur? (among those passing on either)

%

37

20

24

11

7

37

9

11

32

11

Yes, both

Yes, management only

Yes, ownership only

No

Don't knowIndonesia

Global

81% plan to pass on management

and/or ownership to the next gen

(57% Global)

11

14

23

34

18

14

26

23

27

9

Within 2 years

3-5 years

6-10 years

Later

Don't know Indonesia

Global

of those who already have next gen working in the business, plan to pass

on management and/or ownership to the next generation (68% Global)94%

But rising to…

have NOT involved next gen in preparations for these

changes (30% Global)30%

Q14f. Is there any plan to pass the leadership and management and / or the ownership of the company to a next generation family member? Q14h. And in what time frame are you likely to pass the [leadership and management and ownership / leadership and management] of the company to a next generation family member? Q14j. Have you involved the next generation family member (or members) in any preparations for this/these changes?

Base: all respondents/all passing on mgmt and/or ownership answering (2018: Indonesia=54/44, Global=2940/1661-1665)

Values > Purpose > Impact > Legacy

This section provides an overview of both family values and the values of the business and how these impact on the business, whether businesses engage in philanthropy and the long term goals of the business.

PwC

72% have a clear sense of company and/or family values but only a half have their values and company mission down in written form


31

Q15. I’m now going to read out some more statements. For

each one I read out, I’d like you to tell me how much you agree

or disagree on a scale of 1-5, where 1= Disagree strongly and

5 = Agree strongly.


%

Agreement with statements

76

72

70

69

67

54

50

66

79

77

68

75

60

49

You have a defined code of conduct

You have a clear sense of agreed values and purpose as acompany

You are committed to and adhere to Corporate SocialResponsibility

You have a documented vision and purpose statement(mission) for your company

The family that owns the business has a clear set of familyvalues

The values of the family that owns the business define clearexpectations for family members

You have the family values and mission for the companyarticulated in written form

Indonesia

Global

PwC

Those with a clear sense of agreed values are less likely than the global average to agree that those values have framed their vision for the company (44% vs. 83% globally).


32

Q16. You agreed that you have a clear sense of agreed values

and purpose as a company. Would you say that these values…

Base: all respondents saying their company has a clear sense of agreed

values and purpose answering


Would say that values and purpose…

%

67

51

51

46

44

41

36

79

81

74

82

83

76

59

Are communicated on an ongoing basis to your employees

Stem from those running the business

Have become stronger over the years

Stem from those who own the business

Have framed your vision for the company

Have always been present in the family

Are communicated on an ongoing basis to your customersIndonesia

Global

PwC

Those with a clear sense of agreed values feel strongly that these benefit the company in many ways; notably terms of the bottom line – competitiveness, revenue and profitability


33

Q17. And which of the following impacts, if any, would you say

that these values and purpose have had on the business?

Would say they have…

Base: all respondents saying their company has a clear sense of agreed

values and purpose answering


Would say that values and purpose…

%

FBs in Indonesia are less likely than the global average to agree that values and purpose benefit staff retention or

happiness

74

72

67

62

56

56

54

49

75

70

87

79

78

73

85

82

Created a competitive advantage

Increased your company's revenue and profitability

Improved your company's reputation in the market with customers

Made your company more attractive to potential joiners

Increased sustainability

Increased brand awareness

Made your company a happier place for employees to work

Improved your company's staff retention

Indonesia

Global

PwC

Globally 80% say they have a clear sense of company and/or family values. When asked to describe what these values are, however, the answers tend to be rather thin and somewhat generic


34

Honesty

Hard work

Respect

Words that come up consistently include:

Companies who have written down their family values and mission give richer and more detailed answers. More values,

better articulated – evidence that the rigour of committing values to paper is a meaningful process.

Additional words that come up regularly include:

Integrity

Good value

Employee

Community

Customer

People

Integral

Committed

Ethical

Sustain

Innovate

Quality

Trust

Fair

Open

Companies who have written down their family values and mission are also more likely than average to:

• Have a formal succession plan in place

• Have a fully costed, formalised and communicated mid-term strategic plan in place

• See cyber and AI as challenges

• Have grown in the last two years

• Expect to grow in the next two years

Q18. Can you please describe what these family values / expectations of family members are? Open ended question

Base: all Global respondents who have a clear sense of agreed values and purpose (2018: n=2323)

PwC

Majority are engaged in some form of philanthropic activity. 56% are engaged in activity beyond giving money to good causes and the local community


35

Q19b. Which, if any, of the following philanthropic activities does the family business

and/or the family owning the business engage in…


Engaged in any philanthropic activities?

%

61

35

33

13

11

7

7

20

81

41

49

12

22

6

12

10

Giving money to good causes & your local community

Engaging employees in decision making about community service

Providing voluntary services to your local community

Running a 'salary sacrifice' donation scheme for employees

You have a family foundation

You have a joint foundation with other families

Other

None of these

Indonesia

Global

56%are engaged in any philanthropic activity

above giving money to good causes

(68% Global)

PwC

Those engaged in philanthropy use a variety of methods to ensure these activities happen. 28% try to measure impact (similar to the global average)


36

Measuring the success/impact of philanthropyMethods used to ensure philanthropy occurs

%

19

14

14

12

9

7

5

2

10

11

4

5

13

8

6

12

Sustainability report

Separate report of philanthropic activities

Non-financial reporting (GRI)

Global reporting standards

Employee feedback

Publication on our website

Measuring Social Return on Investment (SROI)

Customer feedbackIndonesia

Global

try to measure success or impact of their activities (29% Global)28%

33

28

23

16

16

12

12

2

34

42

19

24

22

16

13

4

Incorporated in family governance

Embedded in the firm's strategy

Embedded in corporate governance rules & articles of association

Integrated into the investment strategy of the company

Delegated to a next generation family member

Embedded in supply chain strategy

Embedded in shareholder agreements

OtherIndonesia

Global

28%

Q20. Which of the following methods, if any, do you use to ensure that these philanthropic activities happen? Is philanthropic activity…

Q21. Do you try and measure the success or impact of these philanthropic activities?

Q22. And how do you measure (or try to measure) the success or impact of these philanthropic activities?

Base: all respondents engaged in philanthropy answering (2018: Indonesia=43, Global=2649/2659)

PwC

Over the longer term, 74% want create dividends for family members; significantly higher than the 57% who cite this globally


37

Q14o. I’m going to read out some potential longer term goals

i.e. over the next 5 years or longer. I would like you rate each

goal on a scale of 1-5 where 1 means it’s not important to you

over the long term and 5 means it’s essential to you.


%

Long term goals (Top 2)

74

70

67

65

56

50

31

To create dividends for family members

To protect the business as the most important family asset

To create a legacy

To create employment for the wider community

To ensure the business stays in the family

To become environmentally sustainable

To create employment for other family members

Global

57%

76%

60%

59%

61%

60%

20%

PwC

Globally, continuity/endurance is key to legacy hopes; of the physical business, of the family involvement, of the growth and success of products & services, of the support given to communities. Many family businesses define success not just in terms of financial wealth but in less tangible elements of personal growth/development, community/employee support and the upholding of core values.


38

What want lasting legacy to be – global findings

• To be a well-respected, honourable employer, with happy and secure employees

• To maintain family values/feeling e.g. honesty, reliability, integrity,

• To have benefitted society – not taken advantage of it. To have made a difference in a

positive way e.g. local projects, charity initiatives

• For children/family members and employees to have a good life/to thrive (financially and

in a broader sense) as a result of the business

• To leave a source of wealth and employment for family, employees, shareholders and

community

• To endure and remain a sustainable player in the market; to keep going and to keep growing.

To leave behind a strong, profitable enterprise.

• To face and overcome challenges and changes, to stand up to pressure

• To have stewarded well so as to pass the business to next generations in a better shape than

it was inherited

• To leave a legacy of quality products/services

• To have diversified and professionalised where appropriate

For the Family / Community For the Business

“To have built a successful business that has been able to provide good jobs and to

have given positive contribution to the society.” (Indonesia)

Examples from Indonesia

“That the value that the family instills continues to run, bringing positive benefits to

the people of Indonesia as a whole.” (Indonesia)

“To have our business last for generations beyond the core family, continually existing,

expanding, growing, evolving to meet market demands being led by a team of

professionals and remaining as a source of blessing for the community” (Indonesia)

“To be known as a successful corporation that uses creativity and innovation to

increase its value in bringing many opportunities to employees and society” (Indonesia)

Q23. What would you like your lasting legacy to be? Open ended question

Base: all Global respondents (2018: n=2952)

Gender Equality

This section provides an overview of presence 0f women in the business.

PwC

Women average 24% of board members in Indonesian family businesses and average 27% of the management team


40

…but fewer than one in five next gen working in the business are women

%

Average % of people on the

board who are women

S9i. Approximately what proportion of people on the board are women?

ii. Approximately what proportion of people on the management team are women?

iii. Approximately what proportion of Next generation family members working in the business are women

Presence of women in the business

Average % of people on the

management team who are

women

Average % of next gen working

in the business who are women

Base: all respondents/all with next gen working in the business answering (2018: Indonesia=54/31, Global=2940/1896)

2421

2724

18

23

Indonesia Global Indonesia Global Indonesia Global

Appendix 1:

Survey Background

PwC

Global company profile – what companies were included?


42

Base: all Global respondents

(2018: all answering n=2900-2950;

2016: n=2802)

22

11

8

7

7

5

4

4

Manufacturing

Wholesale

Food & drink (manufacturing)

Construction

Retail

Agriculture

Transport

Technology (manufacturing)

%

Turnover (sales) (US$) Number of Generations

* Sector (2018)

Other sectors: 3% or less

12 1713

15

1920

1716

24 20

5 46 6

2018 2016

$1bn+

$501m-$1bn

$101-500m

$51-100m

$21-50m

$11-20m

$10m and under35 28

3739

16 21

11 11

2018 2016

4+ generations

3 generations

2 generations

1 generation

Family’s Role in the Business

91

9

Own and manage

Just own, don'tmanage

90

10

2018

2016


PwC

Global respondent profile – who did we talk to?


43

%

* Current Job Role / Position Age

Family member

11 10

26 23

32 34

22 22

9 10

2018 2016

65 or older

55-64

45-54

35-44

Under 35

Gender

45

40

20

61

51

25

Owner

CEO / MD

Chair

On Management Team

On Board of Directors

Other role / position

65 64

35 36

2018 2016

Non-family member

Family member81 85 86

19 15 14

2018 2016 2014

Female

Male


Base: all Global respondents

(2018: all answering n=2822-2950;

2016: n=2802)

pwc.com

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completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of

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© 2019 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see

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