Brexit and Oyster Sauce

It is staggering that David Cameron asked the British people to determine, by ‘simply majority’, whether or not to leave the EU. There was little notice, precious little information made available, and no let-out clause as to what to do should the terms of the exit agreement be disastrous.


I have spent over 30 years working with families to protect their family assets from disputes, whether from within the family or from third parties. The secret to success has little to do with the terms of the family constitution or the quality of its professional trustees; it is simply a matter of good family governance supported by a robust structure.


I coined the term Family Governance in 2001, more than 18 years ago, to mean; ‘the facilitation of effective, entrepreneurial and prudent management of family wealth to deliver its preservation for future generations.’


Family Governance invariably includes

            An executive board,

            A non-executive board, and

            A binding family memorandum or constitution.


Within the documentation, which is bespoke for each client, needs to be terms as to when a decision is effective; how much notice is needed, the information made available and whether the vote is by simple majority (50%) or by special resolution (75%).


Anything as fundamental as leaving a trading club would need plenty of notice, significant information, meaningful discussion and a special resolution. None of this happened within Family Britain and look what a mess we are in now!


The history of the Lee Kum Kee family, is a case in point.


In 1888, Lee Kum Sheung started LKK in Guangdong, China, as an oyster bar, which moved to Macau in 1902 and finally to Hong Kong in 1932. As part of the business it developed its, now famous, oyster sauces which are known worldwide.


But growth was not always straightforward.


In 1972, Man Tat, who now runs the company, proposed the addition of products, such as soy and hoisin sauce to expand the business. His father supported him, but his uncles did not. Unable to resolve the dispute, Man Tat had no option, but to buy out the uncles; an expensive and damaging resolution to their dispute.


In 1986, Man Tat wanted to increase factory production, but his younger brother refused. Again, without good governance in place to determine how to resolve the dispute, Man Tat was obliged to buy out his younger brother, another expensive and damaging resolution to their dispute.


Man Tat, now, had sole ownership of the company and wanted to expand the management to include his five children.


In 1999, his youngest son Sammy Lee went against his father. He wanted to expand the business to include an herbal health care product division, but after years of trying, Man Tat wanted to sell it. Sammy refused.


At the turn of the millennium, Sammy decided to suggest a compromise – a five-year grace period to allow his health care unit to become profitable. His father agreed and within this period his business became successful.


Today, the LKK Group is the largest oyster sauce maker in the world, and on track to become the largest soy sauce maker with £3 billion in annual profits. The health care unit however, generates double this revenue and profits.


How did this come about? In 2002, Sammy and his siblings proposed the creation of a family council and an executive board. The details of which I am not privy, other than what is publicly available.


The family council, is composed of Man Tat and his wife, their four sons and their one daughter. The council handles the family affairs, such as distribution and succession. The board, is composed of Man Tat and his sons, and this handles the business and its direction, growth and expansion.


Good family governance documentation needs to lean heavily on good corporate governance and provide ways to circumvent the mischief which this area of the law has uncovered. For example; I have seen directors of a family business drive down the business until it was virtually worthless, then buy the shares of their siblings who were not in the business, at a knock down price, to then drive up the business to its former profitability.


At the heart of good governance is the supply of adequate information and time before a decision needs to be taken. Then there needs to be enough people at the meeting for there to be a proper discussion at which all the issues of concern need to be raised and discussed.


Good governance provisions need to be able to settle disputes without recourse to lawyer’s opinions, mediation or litigation, although these must not be ruled out if there is a stalemate.


At GFOS we are experienced family governance experts as well as specialists in creating the structures to support it. We use trusts and foundations as necessary to achieve the founder’s or family’s requirements. We aim to protect the family and its assets by providing means to resolve disputes, stamp out indecision, and thwart opportunistic creditors, divorcing spouses and many other dangers and difficulties.


If you would like further information as to what GFOS does for its clients please visit, or phone for an appointment with Caroline on 020 3740 7422 or on 07979 188 288, or email on


Please also go to our website if you would like to buy Caroline’s books; ‘When  you are Super Rich who do you Trust?’  or ‘Uncovering secrets; How to win business from Private Clients’ or  you can buy direct from Amazon.