Chavalit Frederick Tsao on how family businesses can promote sustainability and philanthropy goals

Fourth‐generation shipping tycoon and passionate proponent of conscious entrepreneurship Chavalit Frederick Tsao says family businesses are uniquely empowered to change capitalism for the better

Chavalit Frederick Tsao ushers us into a meeting room in his handsomely decorated office spread across two floors of prime real estate in Singapore’s central businessdistrict. He is wearing a vivid blue suit cut from what appears to be a wool‐silk‐linen cloth, accessorised with a belt bearing a golden peace sign. “I grew up in the 1960s,” he explains. “Anti‐authority, the hippie movement, communal living, free love, great music. Then gradually, we moved into the ‘Me’ era. Wall Street. Greed is good! Consumerism. Globalisation. Full‐blown market economy.”

With an accent that reveals his cosmopolitan upbringing—born in Hong Kong, raised across Southeast Asia, college‐educated in the US—Tsao speaks in concise sentences, a mix of whispers and exclamations. (His cadence and philosophical tone are reminiscent of Bruce Lee: “Empty your mind. Be formless. Shapeless, like water.”) He also frequently finishes statements with a cry of “Right?” or “Correct?”. Tsao seems eager to get your buy‐in; it’s like he wants to bring you around to his unique perspective on things. “When we change our world view,” he says, “how we change our way of seeing informs how we think, how we feel and how we respond.”

Tsao’s own outlook was forever altered following a spur‐of‐the‐moment visit to a practitioner of traditional Chinese medicine 30 years ago. He recalls: “I went in to see this doctor. I was a young man then. I was not sick. It was just curiosity.” There, Tsao was exposed to the ancient Chinese practice of qigong. “This is interesting,” he thought. “Better do some more research.”

Intrigued by his discovery when he first began exploring qigong exercises, Tsao says: “I could feel the qi moving. ‘Wow, it’s a miracle. Something is moving. This qi thing is real! Let’s study some more.’ Then, as I practised qigong, I started doing meditation.”

Meditation took Tsao on a journey inward, leading him to question the materialism he would have been surrounded by throughout the 1980s, and during his privileged boyhood. “I found out there is no reality except your mind,” Tsao says. “There’s no reality outside. Everything external is just information flow.” This revelation profoundly influenced his approach to both business and life.

In 1995, taking the reins of his family company at the age of 37, Tsao manifested a new reality for the firm, initiating the transformation of IMC Pan Asia Alliance Group—or IMC Group for short—from a straightforward shipping company into an international conglomerate with diverse interests across a range of sectors, including investing, lifestyle, well‐being and, recently, the “happiness economy”. While expanding IMC Group, Tsao was acutely aware that for the company to operate responsibly in the contemporary era, sustainability had to be securely integrated into its corporate culture.

He acknowledges the environmental impact of the shipping industry, a field his family has long been involved in—their business dates back to the Qing dynasty, in early 1900s China—and applauds the regulatory steps being taken by governments and industry bodies such as the International Maritime Organization, which has set the ambitious goal of reaching net‐zero greenhouse gas emissions from international shipping by 2050. In a world where environmental concerns often conflict with free‐market principles, it is a little unusual for a capitalist to advocate stricter regulation. Tsao explains his stance, stating: “Even in a free market, just like society, you still need [the] police to stop the bad guys from taking advantage of our freedoms. Right? You still need rules and regulations.”

Recognising the importance of regulation in curbing the negative aspects of unchecked capitalism, Tsao mentions that he “actually lobbied for more laws” during his years as the chairman of the International Association of Dry Cargo Shipowners (or Intercargo for short), a voluntary non‐profit association that represents the interests of dry bulk shipowners, managers and operators. His objective: to ensure that all shipping companies are on a level playing field and working towards the same sustainability goals.

Tsao says that under the current model, those with the greatest spending power tend to dominate. “Think about it. Pharmaceutical. Wall Street. Big tech. Media. Military. Do they get regulated in the US? No, because they have big lobby funds,” Tsao argues. To ensure fairness, sustainability and businesses acting in the best interests of mankind (as opposed to simply serving shareholders), stronger regulation is required.

Our current environmental and social challenges, such as poverty, inequality, pollution and climate change, “all that is created by the free‐market economy, which is very powerful”, Tsao says. “We have enough to share, almost $100 trillion of GDP globally, divided by eight billion people. We have more than enough for everyone. But not enough to satisfy greed. It’s a distribution problem, right?”

Tsao is the founder and permanent honorary president of the Family Business Network (FBN) Asia as well as the chairman of the Council of Wisdom at FBN International. In his view, family‐owned businesses are uniquely positioned to bring about the type of meaningful change the times require. “Around 70 per cent of GDP is controlled by families—60 per cent of employment and two‐thirds of companies,” he points out. Family businesses, he adds, have the capacity to easily adopt and promote sustainable practices because they can make decisions independently, without having to bow to the profit‐driven demands of shareholders. He stresses the need for family businesses to evolve and align with sustainability goals, drawing a parallel between their sustainability challenges and those of the world. Tsao asserts that sustainability is rooted in love, and that embracing love is the key to both personal and global sustainability. As he poetically puts it: “If you are love, you are always sustainable. If you are fear, you’re never sustainable.”

When asked about the challenge of maintaining family wealth across generations—the subject of an upcoming book he is currently completing—Tsao underscores the values of legacy and prudence. He observes that every family business globally shares these values, but their interpretation can be limiting. Legacy, he suggests, should go beyond personal ego and become a catalyst for creativity and entrepreneurship. Prudence, while crucial, should not be fuelled by a crippling fear of losing wealth.

The fourth generation in his family to run the company, Tsao acknowledges that he, too, grappled with this fear when he took over the family business. “I was worried and fearful,” he concedes. “No one wants to be the generation that loses the family fortune.”

This terror of failing to maintain a family legacy (and falling into the trap of “three generations from shirtsleeves to shirtsleeves”) frequently stymies the evolution of a business. Tsao argues that a family‐owned organisation cannot be kept preserved in aspic; its stewards must embrace change and innovation, and remain entrepreneurial. “You can only sustain and flourish if you evolve,” Tsao says. “Correct?”

One of the critical challenges faced by family businesses is the potential for internal conflicts over wealth distribution and power dynamics among family members. Tsao attributes such conflicts to ego‐driven self‐interest. He says families must shift their mindset from self‐centredness to one of service and purpose. “If we agree to serve a purpose, we won’t fight because our self‐interest seems very mundane when we serve something bigger,” Tsao states. This shift towards a purpose‐driven approach fosters harmony within the family and a greater sense of fulfilment.

The way we live our lives inevitably colours how we run a company or function as an employee, Tsao believes. “You can only have a good life if purpose is your driver,” he says. “A purpose‐driven life will lead to a purpose‐driven business.” This philosophy underscores the idea that businesses should focus on more than just profits; they should also consider their societal and environmental impacts. This is an easier task for family‐owned firms, whose leaders are not subject to shareholder pressure. “Somebody has to kick‐start [the] reform of the market economy,” Tsao says. “If you’re leading a family business, you control the business, so you have destiny in your own hands.”

Instead of viewing themselves as owners of the business, today, Tsao and his family see their role as that of stewards or caretakers. This approach prioritises service and self‐cultivation over wealth accumulation, Tsao says. “So the family is using the wealth to serve humanity. And in the meantime, they evolve, which begets wisdom. And with wisdom, they can protect that wealth better,” he explains.

Philanthropy is a big part of this dedication to serving humanity, but Tsao would prefer we rethink the concept, returning to its etymological roots in the Greek words “philein”, meaning to love, and “anthropos”, meaning humankind. “Philanthropy is not giving, OK? It’s not charity. None of that,” Tsao says. “The love of humanity is philanthropy.” When you think of philanthropy in this way, it becomes a way of life, rather than standalone acts of charity or benevolence. In Tsao’s view, a joint commitment to philanthropy—to caring for your fellow human being—can help foster a common cause as well as unity among the stewards of a family business. “It’s not something you’re doing for anybody else. No, you do it because that’s the only way you’ll have a good life,” Tsao reckons.

When asked about how he gauges the effectiveness of a philanthropic initiative, or the successful deployment of family capital in impact investing, Tsao flips the question on its head. “If you take success out of your life, you’ll be happier. Somebody asked me, ‘What’s your idea of happiness?’ I said, ‘Take the idea out and just be happy.’ That’s called being.”

Regarding the growing emphasis on environmental, social and governance (ESG) factors in financing, Tsao does not find it surprising. He sees this shift as a necessary course correction for a world currently driven by greed. “It’s the law of energy. It’s the Dao. You can actually predict the cycles,” he suggests. “I predict we’re going into this new great period of time because it’s so bad now, it’s like a counter. The pendulum is going to swing in the opposite direction. We’re so greedy now that people will start to look for wellness and happiness. Like the United Nations says, we need to create not a GDP, but a GNH: a Gross National Happiness.”

In the realm of technological advancements, Tsao is excited about various fields, including life sciences, biotechnology and human augmentation. Again, he steers clear of fear. He believes that science and technology are inherently neutral and can be used for good or bad purposes. “Nuclear energy is great, but making nuclear weapons, that’s not a good idea,” he says by way of example. When harnessed for the benefit of humanity, innovation tends to lead to positive outcomes, Tsao says. “Any new technology has always created more jobs.” He allows, though, that in tech, “there’ll always be bad guys, just like in the market economy. They’ll be around. It’s up to the good guys to make sure that we collectively stop those who are greedy, who are evil.” While he acknowledges the existence of bad actors, Tsao has faith in the inherent goodness of most humans. “In my life, I meet many people, and I rarely see bad people. Most people are genuinely quite good. Maybe just scared. Insecure, perhaps. But most people don’t have ill intentions,” he says.

The author of several books promoting elevated consciousness in business and a more enlightened approach to leadership, Tsao says he does not find writing particularly enjoyable, but his books serve a practical purpose. Firstly, they are a tool for training IMC Group’s staff, and secondly, they invite dialogue around his ideas, acting as a medium to engage with others and exchange perspectives.

However, he believes that getting a group of people together over cocktails is probably the best way to disseminate ideas. “People echo one another, right? So at a party, I’ll present an idea about wealth management and then when the martinis are working, when you’re serving some nice wine and champagne, everybody becomes quite agreeable to your theory of change,” he says. “Then you move around and talk, and people start talking with one another, and you’ll find that they talk one another into it.”

To similarly influence employees, IMC Group operates the Mindful Living Program, which involves sending staff on lengthy retreats to practise yoga, meditation and the like. Tsao is an active participant. “You don’t go in there and say, ‘We’re going to do a two‐hour stretching session.’ You do it with them,” he explains. “And they say, ‘Well, if this old man can do it, I can do it too’, right?”

As Tsao tells his staff, “the most important thing is [to] find out who you are and live your calling; find your purpose”, and the programme is geared towards exactly that. “We do eight‐day, seven‐night retreats. Non‐stop, whole day. People can actually get into themselves, find out what’s happening inside,” he says. “Very rarely do you have the opportunity to spend a whole week finding out who you are. It’s about being journey‐mates. Travelling together, towards purpose. If our work doesn’t relate to our life, there is no purpose.”

His aspirations for his children and grandchildren are no different to his hopes for his staff, Tsao says. “Find your calling. Live a purpose‐driven life. A lazy life has no happiness. Embrace work. Creativity. Add value to life.”

This article was originally published in Tatler.