Many B.C. companies have dropped the ball when it comes to succession planning. But Fairchild Media Group is one that's making moves to get it right
What does a $350-million media/retail/real estate empire look like? Fairchild Group headquarters offers few clues. The nondescript offices sit atop an empty storefront in South Cambie, with pastel-coloured rooms and dark wood furniture that hasn’t been updated since the 1980s. Thomas Fung, the company’s 65-year-old chair and CEO, clearly has other priorities: “Things don’t come easy; you have to work hard for it.”
Fung built his empire over 30 years in disparate businesses that include the Chinese-language Fairchild Media Group (which owns three radio stations, in Toronto, Vancouver and Calgary, as well as two national TV networks), Richmond’s Aberdeen Mall, Saint Germain Bakery and Daiso. Growing up in Hong Kong, Fung and his family were so poor that they occasionally found themselves homeless—sleeping under stairwells while Fung’s father, King Hey, chased low-paying labour jobs. Eventually, King Hey managed to launch a security brokerage firm Sun Hung Kai & Co with two close friends, and worked his way up to become the largest personal shareholder of Merrill Lynch. When King Hey died in 1985, Fung inherited less than a 10th of his father’s fortune.
Unlike King Hey—who didn’t have a full estate plan—Fung decided to set up a family fund shielding a portion of his assets from economic volatility. And in preparing for succession at Fairchild Group, he has devised a plan whereby Joseph, his only child—now managing principal at Fairchild Management Capital (the company’s investment arm, based in Hong Kong and focused on the Chinese market)—will be allotted 49 per cent of his shares; the remaining 51 per cent will be divided among key employees and friends. It’s a structure that Fung hopes will motivate the team to support his son and allow the 35-year-old to prove his management skills in the 1,000-person company.
Before joining Fairchild in 2009, Joseph worked for seven years in finance and business development at Morgan Stanley in Singapore and New York and at Hong Kong’s PCCW Media. In March, he also opened a nonprofit private school in Hong Kong—with Fairchild money—that teaches a Canadian-inspired, student-centred curriculum. “Joseph has very strong social skills,” says Fung. “He’s capable, he speaks six languages, he has very close relationships with politicians, business associates and working partners. One thing he has to strengthen is managing the staff.”
As a young father, Fung instilled frugality in Joseph by taking him on trips across Asia and South America to visit impoverished neighbourhoods. And he’s proud to note that Joseph eschews business class airplane tickets and dining out at Michelin Star restaurants. Still, he did spring for his son’s lavish 1,200-person wedding at the Vancouver Convention Centre last year—a seemingly out-of-character move for the famously thrifty titan.
“In the beginning, I actually didn’t want a big party at all. Neither did Joseph,” says Fung. He then chuckles aloud. “But then another thought came to me: Maybe I take that opportunity to introduce my associates to him and introduce him to my peers? Instead of doing it one by one, might as well do it all at once—in one day.”