The cost of an ill-prepared successor: Lessons from CDL and beyond
(First of two parts)
Every founder dreams of building something enduring, a business that stands the test of time. But a vision without a capable steward is a disaster waiting to happen.
Too many family businesses make the same fatal mistake—assuming that bloodline guarantees leadership. The reality? A name on the door does not make a leader. Without preparation, without governance, without the right values, even the strongest legacy can crumble overnight.
We are seeing this unfold in real time with one of Singapore’s most prestigious family-controlled businesses: City Developments Ltd (CDL).
The Kwek family crisis: A wake-up call for founders
The public feud between CDL’s executive chair Kwek Leng Beng and his son, Sherman Kwek, is more than just a boardroom dispute—it is a stark warning about what happens when succession planning goes wrong.
Sherman, the heir apparent and CEO, was accused by his father of consolidating power through board appointments, moves that Leng Beng saw as a threat to governance and business stability. The elder Kwek, a formidable leader who built CDL into a global powerhouse, took extraordinary legal action against his own son, obtaining a court order to block the restructuring.
But this conflict did not appear overnight.
It was the result of years of misalignment—in leadership philosophy, governance approach and financial decision-making.
Sherman had been groomed for leadership; yet, under his watch, CDL lost $1.4 billion from failed investments. That staggering loss shattered his father’s confidence in his ability to lead.
In a rare admission, Leng Beng revealed the painful truth every founder must confront: “As a father, firing my son was not an easy decision, but the stakes were simply too high.”
This is not just CDL’s problem.
This is the reality of every family business that neglects true leadership preparation.
Succession is not about inheritance—it is about capability, character, and alignment of values.
If the successor is not ready, not capable, not aligned, then founders must act now. Because by the time the crisis hits, it is already too late.
Family business misalignment: A crisis across Asia
As a senior accredited director at the Singapore Institute of Directors (SID) and a mentor to next-generation leaders across Asia, I have witnessed this same crisis play out again and again.
Too many founders believe that financial success alone ensures continuity.
It does not.
In my mentoring sessions, I hear the same frustration from heirs:
“My father built an empire, but he never prepared us to lead.”
“I know how to read financial reports, but I don’t know how to unite my family.”
“We have governance agreements, but they were never enforced. Now, we’re falling apart.”
These are not isolated cases. This is a systemic failure in family businesses.
The real threat to family businesses: Neglecting governance and values
In 2015, I was engaged to mentor a 39-year-old heir of a multibillion-dollar conglomerate.
His father, a self-made tycoon, had built an empire spanning multiple industries across Asia. But when the patriarch passed, everything unraveled.
Why?
Because while the father had full control, he never prepared his son for leadership.
The family avoided difficult conversations about governance, power structures and ethical decision-making.
Their Family Constitution existed, but was never enforced.
Governance structures were paper agreements, not living systems.
Within two years, the business was in crisis.
Sibling rivalries exploded. Boardroom conflicts intensified. Decisions were made based on personal interests, not shared purpose.
I was brought in to reset family relationships—but by then, the damage was already severe.
A decade later, we are still picking up the pieces—shattered relationships and an impaired balance sheet.
