Roles of Family Trusts in Thai Family Businesses
Keywords:
Assets custodian, family trust, Thai family businessAbstract
This research studied the importance of the family trust as the mechanism system that the shareholders of the family business use to maintain the proportion of management power of their businesses. The research is a qualitative research using in-depth interviews to collect data from owners, executives or authorized persons from the family firms which are listed on the Stock Exchange of Thailand and employs content analysis to analyze the data.
The findings revealed that many large family firms listed on the Stock Exchange of Thailand have set up asset trustees as family funds in various forms as a mechanism for overseeing the family assets and controlling the shareholding structure of family members. The aim of setting up the trust is to maintain the power of business management. The findings also revealed that the family firms set up the trusts to ensure the risk of any members selling or transferring shares to other people who are not members of the family. The findings added that the important role of the trusts was that most families participated in this research have empowered the trustees of the family trusts as one of the main mechanisms in order to transfer the family business to the next generation of business heirs. The findings, finally, revealed that the Thai family firms participating in this research plan to have the trust to act as asset custodian for basic living standard of the family members in the future.
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