Family-owned businesses flourishing in Kingdom

1 / 5
2 / 5
3 / 5
4 / 5
5 / 5
Updated 12 April 2016

Family-owned businesses flourishing in Kingdom

JEDDAH: Family businesses will grow further and flourish in the Kingdom, says a top Saudi industrialist.

Anees Ahmed Moumina, CEO of SEDCO Holding Group, expressed this optimism on the sidelines of the Family Owned Business Forum at the Jeddah Hilton on Monday.
The most important element of family business is corporate governance and this forum talks about this issue, Moumina told Arab News.
Eihab H. Abou-Rokbah, chairman of Arabian Mehad Excellence (AME) and the driving force behind the forum, said family businesses have always been there. “The good thing is that they adapt to changes better than the companies not owned by families.”
The chairman added: “I do really believe family businesses should have strong management and financial foundations. With these two, there is no doubt about solid growth. And if family businesses have good corporate governance in place, then they will sustain for a very long time."
Mark Goyder, founder director of Tomorrow’s Company, said a number of family business owners and people from each generation could benefit from the deliberations.
“There was valuable discussion where we talked about the principles of corporate stewardship. The discussion also focused on how the younger generation learns the tools of the trade. The workshop explored how to preserve the values in a dynamic market,” Goyder said.
Tarek Alnabulsi, managing partner of Institutional Sustainable Growth (ISG), said the participants at the forum shared their experience and focused on succession planning.
He said family businesses represent 90 percent of the enterprises in Saudi Arabia. So sustainability of these businesses is very important for the Saudi economy.
The key challenge facing the family businesses is succession planning, he said, adding that family businesses in Saudi Arabia will continue to show better performance than other companies globally.
He said there are some challenges facing family businesses in Saudi Arabia. “Entrepreneurship is very important in family businesses,” he said.
Adib Haroun Rashid, Ernst & Young’s MENA family business centre of excellence leader, said: “Ernst & Young created the family business center of excellence to focus on issues facing family businesses and how their families can deal with those issues. When we looked at the issues, we found common themes that successful families have done to ensure successful transition between generations.”
According to him, the first and foremost is to set up proper governance rules that enable family members to have clear roles and responsibilities, and segregate business and family issues.
This will help create forums for dealing with family topics outside the business and also establish clear communication channels related to business and family issues.
“The second issue is related to succession. We found that around $1.6 trillion will change hands from one generation to the other over the next 10 years globally,” he said.
Accordingly, a clear succession plan for ownership and management is needed to be put forward in order to ensure smooth transition between generations and ensure continuity of business.
Adib said in Saudi Arabia, the family businesses will continue to contribute to the economy even during the transitional phases between generations.
“They thus need to start planning on succession and proper governance structures to ensure the continuity of their businesses and the unity of the family,” he added.


EU announces strict 5G rules, but no Huawei ban

Updated 3 min 33 sec ago

EU announces strict 5G rules, but no Huawei ban

  • Any bans on Huawei will now ultimately be up to individual member states
  • Huawei is widely viewed as providing the most advanced alternative for super-fast data transfers

BRUSSELS: EU countries could ban telecoms operators deemed a security risk from critical parts of 5G infrastructure under bloc guidelines issued Wednesday, amid US pressure to shut out Chinese giant Huawei.
The plan, which closely mirrors rules set out by Britain allowing a limited role for Huawei, stops short of barring the company from building the next-generation communications network that provides near-instantaneous data transfers.
It leaves member states with the responsibility to ensure the safe rollout of 5G and warns them to screen operators carefully, saying security of the network will be critically important for the entire EU.
The so-called “toolbox” outlined by the European Commission avoids naming Huawei and does not call for an outright ban on any supplier.
But it urges countries to “assess the risk profile of suppliers” and “apply relevant restrictions for suppliers considered to be high risk” accordingly, including shutting them out of “key assets defined as critical and sensitive.”
It also recommends EU states avoid “major dependency on a single supplier” and “dependency on suppliers considered to be high risk.”
The guidelines are the fruit of months of agonizing within the EU, which has struggled to find a middle way to balance Huawei’s huge dominance in the 5G sector with security concerns pressed by Washington.
Any bans on Huawei will now ultimately be up to individual member states, but the commission’s middle road recommendations give cover to European capitals to resist pleas from Washington.
London’s announcement on Tuesday of a limited role for Huawei infuriated Washington, which says it cannot be trusted with such important infrastructure because it is too close to the Beijing government.
The US has banned Huawei from its own 5G roll-out because of security concerns and threatened to limit intelligence-sharing with London in the event of the firm winning a major role in Britain.
Britain, like the EU, plans to exclude risky operators from “sensitive” locations such as nuclear sites and military bases, but a US official insisted there was “no safe option for untrusted vendors to control any part of a 5G network.”
Huawei is widely viewed as providing the most advanced alternative for super-fast data transfers behind technologies such as self-driving cars and remotely operated factory robots.
Along with European telecom companies Nokia and Ericsson, it is one of the few suppliers capable of building 5G networks.
The commission warned that 5G will offer “more potential entry points” for cyberattacks — a growing threat as more and more critical services such as hospitals and power grids depend on data networks.
“5G will be a ground-breaking technology but it cannot come at the expense of the security of our internal market,” commission vice president Margaritis Schinas said in a statement.
“The toolbox is an important step in what must be a continuous effort in the EU’s collective work to better protect our critical infrastructures.”