All in the family for Middle East businesses
Dubai, July 1, 2014
More than 80 per cent of family-owned businesses have no term or age limits on board membership and one-third do not evaluate board members' performance, a survey has found.
The survey by Deloitte also found that nearly half (49 per cent) of family-owned businesses in the GCC only review succession plans when a change in management requires it.
As many as 41 per cent of them did not have leadership contingency plans.
Based on the input of 222 survey respondents, the findings indicate gaps in governance, board operations, and succession planning.
The findings are significant because approximately 80 per cent of non-oil GDP within the Middle East region is accounted for by family-owned business groups.
Typically, these privately-owned organisations span multiple businesses, are vertically integrated, own sizeable real estate portfolios and their operational control is still maintained by the original founding family member or the second generation, the survey reveals.
For many families in business, the rapid pace of change and growth in the marketplace presents significant concerns regarding the manner in which they will continue to safeguard and preserve their heritage and wealth.
Family-owned businesses in the Middle East face a range of challenges that affect not only the success of the business itself, but also the professional and personal goals of their owners and their stakeholders at large.
The professional services firm also announced the appointment of a new leader to head its family office offering in the Middle East.
Walid Chiniara, an international lawyer with more than 30 years of experience across the five continents and a leading family business adviser, is the new partner in charge of Deloitte's private client services practice (PCS).
A private client-focused practice, PCS brings in Deloitte’s multi-disciplinary professionals to offer families in business and next generation family business entrepreneurs in the GCC and the Mena region bespoke and region-specific solutions in the area of family governance, succession planning and generational change, wealth management, tax structures and exit strategies.
“This is an exciting time for the Deloitte family and I am pleased that Chiniara, one of the most experienced Family Office Advisors in the Middle East, is joining the firm to lead the PCS unit,” remarked Omar Fahoum, chairman and chief executive at Deloitte Middle East.
Deloitte said it believes that the needs of families in business are different from those of public corporations.
Therefore, the PCS is continuously adapting to ensure that it addresses all facets of a family's wealth, including its human, intellectual, cultural, and financial capital.
Nauman Ahmed, the regional tax leader at Deloitte Middle East, said: "The aim of the PCS division is to provide business families with the tools they need to preserve and grow their wealth – both now and for generations to come."
"The appointment of Walid, with his extensive experience working closely with families in business will further support our ability to better serve our clients and build on the technical capability that Deloitte is renowned for," he added.-TradeArabia News Service