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Formosa Plastics Group's Susan Wang

Philanthropy Fitting for the Times


In this exclusive interview, FPG's deputy CEO discusses the philosophy behind her group's public welfare activities, and the loss of its legendary leader.

Philanthropy Fitting for the Times

By heree Chuang, Isabella Wu, Ching-Hsuan Huang
From CommonWealth Magazine (vol. 417 )

With the passing of Wang Yung-ching, the founder of Formosa Plastics Group known both for his thrift and his charitable endeavors, will the conglomerate's public welfare strategy change? These decisions now fall on the shoulders of Susan Wang, one of Wang's surviving nine children and deputy chief executive officer of the conglomerate's seven-member executive committee.

CommonWealth Magazine recently caught up with Susan Wang to discuss FPG's future direction, and her feelings in the wake of her father's death.

Over the past decades the Formosa Plastics Group (FPG) has poured some NT$36 billion into public welfare activities ranging from education to medical services to sponsoring schooling for young people from Taiwan's indigenous groups. In the next stage without the patriarch at the helm, Susan Wang will set the course for these activities, which is by no means an easier job than steering the giant conglomerate itself.

"No matter what FPG companies do, they must have targets. Every dollar spent must generate a 10-dollar return," says Wang. "The chairman (i.e., her father, Wang Yung-ching) often said society has temporarily handed us this money for safekeeping, so we need to make good use of it."

To an even greater degree, public welfare activities require an emphasis on the "overall effect."

One example is a program that aims to increase the effectiveness of professional early intervention for developmentally delayed children, in which FPG got involved only at the end of 2006. The company made a comprehensive, systematic plan starting with an analysis of earlier research to decide whether it should get involved at all, and proceeding to set benchmarks for evaluating early intervention organizations, planning educational training courses, and even going a step further to consider how reporting on developmentally delayed children could be better facilitated. The plan overthrew the existing modus operandi and challenged the established thinking in the field.

Thanks to FPG's involvement each early intervention organization that received help has been able to expand its capacity, thus helping even more developmentally delayed children. The average age of developmentally delayed children entering early intervention programs fell by 0.33 years, which means that more children were able to receive help during the golden period of treatment between zero and six years of age. Within two years the ratio of children who were able to return to the regular school system following intervention rose by 3.3 percent.

But FPG is not only active in philanthropic endeavors. At the end of last year, the conglomerate finally published a corporate social responsibility report. In its annual report the petrochemicals giant also came clean on environmental issues, which had always been the source of considerable controversy. For FPG, which had been notorious for its lack of transparency, this was a truly big step.

Now that her father has passed away, Wang hopes to run the company with greater transparency. She also hopes to better communicate company matters with the public. "The things that we do should be made public. It's not that what we do is flawless. We should let everyone participate and see what suggestions there are that can help us improve. Only then can we get better at what we're doing," says Wang open-mindedly.

Following are excerpts from the interview with Susan Wang:

Q: In the past the public welfare activities of FPG focused on medical care and education. What will be the future direction?

A: When it comes to public welfare activities, we look at the needs of the times.

In the 1960s and 1970s, when the contract manufacturing industry had just taken off, Taiwan most lacked expert talent, so FPG set up schools to train such people. Back then many people couldn't afford to go to school. So we provided work-study programs that allowed these kids to maintain their self-respect, because they supported themselves with their own hard-earned money. The students who participated in these work-study programs came to our factories for work, which allowed them to combine the theory that they had learned in class with practice on the job. Later on, this would prove immensely helpful for both the company and these individuals themselves.

Subsequently, we began to run hospitals. At the time the standard of medical care in Taiwan was not very high. And because of what happened to my grandfather (Wang Yung-ching's father Chang-Gung Wang died because he could not get immediate surgery for a blockage of the intestine), the founder (Wang Yung-ching) hoped that not a single ordinary citizen would have to suffer the same fate of not getting medical attention when falling ill. The founder even personally went abroad to look for physicians. We not only did a good job establishing the Chang Gung Memorial Hospitals, but also raised the level of Taiwan's medical services as a whole.

Nowadays, the elderly are a bigger problem. That's why we created the Chang Gung Health and Culture Village (a residence for the elderly).

Q: Which direction will your public welfare activities take in the future?

A: It depends on the problem. If we want to do something, we need to think about what's appropriate for us, just as FPG doesn't do just anything to develop its business. You need to know your strengths and what you can achieve with them. Our strengths are cost control, good management, and standard procedures.

In public welfare activities we also need to select things that others find difficult, but that we can do, can push forward. For instance, we have been taking a different approach regarding early intervention for developmentally delayed children. We don't want to just donate money, because by just donating money you won't see any results. FPG is strong when it comes to setting up systems, and we should put this strength to use.

FPG's approach toward the many organizations that are involved in early intervention is that as long as they have received a first-tier or second-tier government appraisal, they meet our basic requirements. We have our own set of indicators for evaluating these organizations. We hope the organizations have individual growth targets for each child. They need to have guidelines for individual teaching, and ultimately we will assess the results.

Philanthropy Needs Evaluation Too

Q: Why did you pick the issue of developmentally delayed children?

A: Often it's a matter of opportunity. We regard every single request as an opportunity for carrying out an evaluation and believe that these requests show what needs our society has. If the evaluation finds that the project suits us and is able to have an overall impact in the long run, we'll do it.

We're also helping imprisoned convicts with AIDS through the "Rainbow Project."

In society no one wants to have contact with AIDS sufferers. On the average every HIV-infected person will infect five others, and those five will go on to impact others.

Following an evaluation we felt that helping these AIDS sufferers by empowering them to survive on their own would be very meaningful. First, we conducted our program at the prison in Yunlin County. We taught the inmates computer design, while also providing psychological counseling, to provide them with a professional skill for after their release from prison. Moreover, they can do such work in their own office without having to get into direct contact with other people.

No matter what kind of project we do, we always evaluate the results. When we evaluated this project, we found that it allows us to potentially save NT$1.5 million in medical costs per every AIDS sufferer. Originally, the recidivism rate stood at 70 to 80 percent. But of the 88 individuals that we counseled, 44 have been released so far and only 15 of them lapsed back into crime, which amounts to a greatly reduced recidivism rate of 34 percent. We feel that the program works, so we've launched it in the Taipei and Kaohsiung prisons too, and hope to expand it islandwide.

We evaluate every single case to see whether it's worth doing. If we decide to do it, we do a comprehensive job. For every amount of effort we put in, we want to achieve a result ten times greater.

Q: What are your feelings since your father passed away?

A: (Remains silent for a while). The day he died he was still holding a meeting with supervisors. They discussed the U.S. economy, and he was asking everyone how the company could keep growing. After the meeting he returned to his desk and finished his cup of coffee. Then he folded the report he had just read, ran his hand over the desk, and stared a few seconds into the distance before saying "Okay, let's go!" This scene has left a deep impression on me. I don't know. In hindsight I now wonder whether...

Q: Which course will FPG take now that the company founder is gone?

A: Our corporate culture is already deeply engrained in the daily lives of all our employees. We have already built a very good foundation, so continuing our course shouldn't be a problem. Most important is the (founder's) spirit – we need to preserve it.

The most important spirit that the founder has given this company is to go to the root of problems and strive for perfection. We have never let up on that. We will not hire a lot of people in good times and then fire them when times are bad. Constant improvement is a must. We can't say we don't need to improve just because we did a good job today. Instead, we need to change whatever isn't logical.

The financial tsunami is not a problem specific to FPG. It's affecting the entire world. But even during the worst times, FPG must also still be better than everyone else. We are quite confident regarding that, because we're still quite competitive.

Q: FPG wants to invest nearly NT$300 billion more in the fifth phase of its Sixth Naphtha Cracker project. How will this translate into growth momentum for FPG?

A: All this is part of our drive to make our system more logical. Right now, Asia's overall oil refining capacity is still on the rise. The amount we produce is relatively small. That's why we need sufficient economic quantity. What we need to consider is, if we feel that FPG is able to do a job better and more efficiently than others, then why not? Ultimately, the consumer will reap the benefits. That's also one of our responsibilities.

Q: Regarding the environment, many large corporations actively communicate with international environmental organizations, because they want to gain worldwide recognition. Does FPG care about public perceptions or make special efforts regarding its environmental image?

A: We're currently establishing a center for environmental protection, safety and health, and this will require more communication from everyone. Without communication, people won't know what we are doing. Therefore, we are joining hands with universities and other academic agencies as a first step. The professors have expertise in these areas; therefore, we should seek closer contacts with them to jointly discuss problems. We are already marching in that direction.

What we do should be made public. We believe that we are doing quite a good job, but this does not mean that there aren't any shortcomings. So everyone is welcome to participate and provide whatever suggestions that may help us improve. Only then will we gradually get better at what we're doing.

(Compiled by Ching-hsuan Huang)

Translated from the Chinese by Susanne Ganz

Formosa Plastics Group

CSR Large-scale Enterprise No. 13

Four Core Companies

Consolidated Revenue for 2007: NT$1.5 trillion

Consolidated net profit after tax for 2007: NT$224.162 billion

Revenue for 2008 (unconsolidated): NT$1.52 trillion

Chinese Version: 王瑞華:我們跟著時代需求做公益