Thursday 28 March 2024
 
»
 
»
Story

Governance ‘key to GCC family business success’

MANAMA, November 17, 2016

Family businesses in Bahrain and around the GCC must focus on governance, succession and structure to ensure sustainability and bolster against external pressures, according to experts.

Around 30 prominent members of family offices came together to discuss important issues facing the sector at an event hosted by law firm Charles Russell Speechlys and KPMG, an audit, tax and advisory firm, in Bahrain.

Families own approximately 80 per cent of businesses in the Middle East and more than half of GCC family businesses are currently planning succession from the second to the third generation. For owners, this can be a complex stage in the business cycle.

According to KPMG, it is estimated that $ 1 trillion of assets globally are likely to be transferred to the third generation during the next decade. However, what is less well known is that only approximately 30 per cent of all family businesses successfully transition to the second generation with even fewer making it to the third and fourth generation, some estimates are as low as 12 per cent and 3 per cent, respectively.

At the event, KPMG in Qatar’s country senior partner, Ahmed Abu-Sharkh, focused on the importance of developing and maintaining good governance for the family, the owners and management to ensure business performance and sustainability.

Abu-Sharkh said: “Family businesses represent over 70 per cent of the GCC’s private sector. However, despite this large proportion, many owners struggle to put effective governance frameworks in place to ensure that the business remains stable and viable. Having a strong vision and mission and a common set of values across the family is essential for success and ensuring longevity of the brand.”

Charles Russell Speechlys, the international law firm with offices in Qatar and Bahrain, emphasised the need for planning ahead in uncertain times to ensure family businesses preserve their unique business cultures and strong brands.

Rupert Copeman-Hill, partner, Charles Russell Speechlys said: “Family businesses play a crucial role in the GCC economy - It’s a $100bn market in the GCC, and now more than ever it is crucial for family firms to look to consider their corporate and legal structures to ensure steady and successful transitions. Carefully considering when and how to restructure and having a clear understanding on compliance and tax optimisation can help family businesses compete with corporates, which may have fewer challenges.” – TradeArabia News Service




Tags: KPMG | Family business | Speechlys |

More Finance & Capital Market Stories

calendarCalendar of Events

Ads