Amin Nasser is a partner with PricewaterhouseCoopers UAE, and has been with the firm in Dubai and London since 1980. He is a fellow of the Association of Chartered Certified Accountants in England & Wales and a member of the Family Firm Institute (US). He is also a member of the Society of Trust and Estate Practioners (UK). He heads the PricewaterhouseCoopers Family Business Forum in the UAE and is responsible for developing the firm’s activities in Family Business Advisory Services in the Middle East. During his recent visit to Dammam, Saeed Al-Asmari of Arab News, interviewed him during which he shared his experience on family businesses in the Middle East. He has worked with a large number of families advising them on key family issues such as continuity, succession planning and conflict management. In this interview, Amin Nasser speaks about how he has helped these families establish their ownership governance and their family constitutions or protocols.
What role do family businesses play in the country’s economy? How do you see the impact of it in Saudi society?
Over 80 percent of the businesses in Saudi Arabia are either family owned or controlled. Family businesses are the backbone of the Saudi’s economy contributing close to 25 percent of the GDP. These family businesses represent a strong foundation of the economy and will continue to play a major role in its development. This is particularly important since family businesses in the Kingdom are major conglomerates involved in diverse economic sectors which help generate significant employmenwt opportunities. The socio-economic impact of family businesses is positive because many of these businesses have multi location/ multi business activities including retail, automotive, manufacturing, construction, and real estate. Some of these families have synergistic operations and this has enabled them to participate in development projects which have shaped the region in the past few years.
How do you assess developing the firm’s activities in family businesses in the Middle East?
PricewaterhouseCoopers is a world-class provider of business advice to family businesses in the Middle East and we ensure that we act as trusted business advisers to those businesses. At PwC, our Family Business Advisory team is dedicated to working with family businesses- both large and small- to envision the future and achieve their goals. Whatever the business, from founder to cousin consortiums, we have facilitated the creation of family governance structures that help family businesses achieve their long-term success. Our multiple lines of services enable the firm to reach out to potential clients with a proposition for various solution sets. Our depth of experience means family businesses can be confident we grasp important issues and know how to respond to them.
How did you help these families to establish their ownership governance and their family constitutions in Saudi Arabia and other GCC?
Our regional team has worked with a significant number of families in the Middle East during the past two decades and assisted them to establish the most appropriate structure for their governance. We get involved with the family business owners as they identify challenges and work toward unraveling them and we help them plan for success. Working with families, we help them successfully implement family governance structure such as Family Councils with the principal focus of addressing key issues facing any family business namely: Conflict management, succession planning and continuity planning.
What solutions (do) you provide (to help family businesses in Saudi Arabia survive)?
Our firm collaborates across its multiple lines of professional services combining its global experience with its local knowledge to offer quality solutions that help family businesses become more competitive and on the right track for continuity and success. Whether it is governance, strategy, or operational innovation we work with the principles of the family businesses to help them articulate their vision and achieve their goals. A number of the family businesses in the GCC are in the second generation and most of these businesses will go through a generational change in the coming years. If this generational change is not properly managed, then it could result in fragmentation of the family businesses.
What risks can be measured for family businesses’ conflicts and how can the conflicts impact the family business? How can conflicts in family businesses be decreased?
Conflict can arise from any number of different causes, from professional to personal. These might range from disagreements about future strategy and direction, to the personal performance and remuneration of individual family members. The consequences can be temporary and minimal, or so disruptive as to overwhelm what might otherwise have been a perfectly healthy business. In the Middle East, some family disputes have ended up in courts, and the assets of the entire firm have been frozen until the case could be resolved. To avoid unresolved conflict, whether real or perceived, family businesses must work toward achieving fairness and transparency and establish a mechanism for resolving conflict internally. We encourage family businesses to agree on a set of rules or protocols that govern their relationship as shareholders, as management and as family. Family businesses are also increasingly creating formal conflict resolution mechanisms which provide a forum where family members in dispute can air their differences and hopefully resolve the issues in an amicable way. However in family businesses, emotions are sometimes quite high and this makes it difficult to resolve issues in an effective manner. Therefore families set up a conflict resolution committee which includes the involvement of an outsider, a person who is trusted and well respected by the family who offers that independent voice.
Through the long journey of PWC in the Middle East over 40 years, what are the most major problems or obstacles that face you and how did you overcome these problems?
Family-owned businesses in the Middle East generally view corporate and family governance as good business practices and most of these families recognize its value. However, most of these businesses do not consider governance to be an important factor for the success of their businesses. A lot of the family businesses in the region have not as yet adopted the modern global corporate culture. In particular, there seems to be some reluctance to giving up boardroom control and to comply with the strict requirements of transparency and governance.
How do you see Saudi Arabia economy? Are you optimistic? If yes, why so?
Saudi Arabia has a thriving economy that has managed to survive the global financial crises and continues to be supported by very healthy government spending on mega projects of infrastructure development, science and technology, health and education. This lends to an optimistic view that over the next decade the economy will be rather stable and on a growth path.
