Family-owned businesses flourishing in Kingdom

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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.


Davos mattered once; it can matter again

A policeman wearing camouflage clothing stands on the rooftop of a hotel near the Congress Centre during the World Economic Forum (WEF) annual meeting in Davos, on January 20, 2020. (AFP)
Updated 21 January 2020

Davos mattered once; it can matter again

  • We don’t make peace with our friends, we make peace with our enemies. Our world is not short of sworn enemies — inviting a few to Davos might not end their enmity, but who knows what progress could be made?

DUBAI: It would be fair to say that in 1996, even after 25 years of its glittering annual gatherings, the World Economic Forum (WEF) rarely troubled the front pages — or indeed any pages — of the British tabloid press.

Which is why it was all the more surprising when my editor barked: “Get yourself to Davos!”

Confused, I inquired: “Isn’t that the chief Dalek in Doctor Who?”

“That’s Davros, you fool. Davos is a ski resort in the Swiss Alps where the world’s most powerful and important people meet every year with the aim of making the world a better place.”

The reason for my boss’s newfound interest in alpine matters was that Klaus Schwab, the founder and chairman of WEF, appeared to have assembled a group of key players in the Northern Ireland conflict who, far from appearing in the same room, normally had difficulty sharing the same country.

Even a quarter of a century later, it is impossible to exaggerate the malign and pervasive influence that events in Northern Ireland, the “strife-torn province” of media cliché, had on the UK at that time.

For three decades, a period known euphemistically as “The Troubles” — an area of barely 14,000 square km with a population of less than two million — was awash with heavily armed paramilitary groups known by a bewildering alphabet soup of acronyms: the IRA, Provisional IRA, INLA, IPLO, UDA, UPV, UVF, RHC, LVF — and that was just the bad guys.

The beleaguered police had their own acronym, the RUC.

The terrorists shot, they bombed, they maimed, they killed, mostly each other, admittedly, but an estimated 1,800 innocent civilians died too. And not just in Northern Ireland. The Irish Republican Army (IRA) in particular carried out a series of high-profile bomb attacks in Britain.

In a dynamic that will be familiar to observers of the Middle East, cynical politicians in Northern Ireland exploited and exaggerated an existing sectarian divide — between the Roman Catholic/nationalist/republican tradition, favoring closer links with the Republic of Ireland and eventual unification, and the protestant/unionist/loyalist tradition, favoring closer links with the rest of the UK — to consolidate their own power bases.

And now here was Klaus Schwab bringing together influential representatives of both traditions in a manner that had eluded British and Irish negotiators for years.

An impressive roster it was too: John Hume, the MP and leading nationalist politician; David Trimble, also an MP and the leading unionist politician; Sir Patrick Mayhew, the UK Secretary of State for Northern Ireland; Dick Spring, the Tanaiste, Ireland’s Deputy Prime Minister; and Mitchel McLaughlin, chairman of Sinn Fein, which was the political wing of the IRA — in the sense that Hezbollah is the political wing of Hezbollah.

What could possibly go wrong?

Schwab would have done well to read up on the eminent 19th-century British politician William Ewart Gladstone, of whom it was said that he spent much of his career trying to solve the Irish Question, but every time he thought he was getting warm, the Irish changed the question.

The reconciliation session that Schwab convened took place in private, but he has since described how it went. First, the parties refused to sit at the same table.

Further tables were summoned, but the configuration was deemed unsuitable.

Further configurations were attempted, until all the participants were satisfied that, while still able to talk to each other, they had plausible deniability that they had entered anything remotely resembling negotiations.

What was said at that historic meeting, only the participants know. The immediate aftermath suggests that it was not fruitful.

A month later, the IRA ended a fragile 17-month cease-fire and detonated a massive bomb at Canary Wharf in London’s Docklands, killing two people and causing widespread destruction.

So are there any lessons to be learned from that attempted reconciliation at Davos 1996? Well, yes, two, I think.

First, when did Davos cease to be a forum at which warring parties could at least try to resolve their differences, and turn instead into a self-congratulatory schmooze fest at which everyone agrees with everyone else?

We don’t make peace with our friends, we make peace with our enemies. Our world is not short of sworn enemies — inviting a few to Davos might not end their enmity, but who knows what progress could be made?

Second, just when you think all hope is lost, it isn’t. It is true that 1996 was a bad year for renewed IRA violence, but a year later Tony Blair became British prime minister and turned up the heat under a simmering peace process of which that Davos meeting was a part.

A year after that, in 1998, the Good Friday agreement was signed in Belfast, a democratic power-sharing assembly was established in Northern Ireland, the province’s feuding paramilitaries laid down their weapons — and John Hume and David Trimble, two participants in a Davos meeting that initially appeared to consist chiefly of moving some furniture, were awarded the Nobel Prize for Peace.