We are beginning to witness a rare event that will transform the history of Latin American business. Largely unnoticed, the leaders of top corporations are being replaced by a younger generation: the patriarchs of the largest family-owned groups are handing over the torch to their heirs.
The succession does not, in general, present a major problem. Most families have been preparing for it for at least a decade. They have family protocols that will ensure seamless, or at least quarrel-free, transitions.
But, the interesting element is that the newcomers have a different mindset than that of the old guard. Most of them have been trained at U.S. business schools. They have traveled extensively and met with customers, competitors and peers across many international borders. They tend to be more sensitive to social and environmental issues that relate to their business operations. They are also highly literate in international financial operations, and are less attached to their assets and more attracted by their returns. They will also be more open to sharing control of their firms with private or public equity holders.
This phenomenon would perhaps merit only a short note in a management publication were it not that this group of executives will manage assets valued at close to $480 billion. That is a figure equivalent to the gross domestic product of Argentina. Without any exaggeration, the decisions of the new guard will shape the performance of the region's economies.
One concern is that these business leaders will become sophisticated asset managers. Under this hypothesis, they would place their holdings in large investment funds and drift away from their...