RIYADH, 20 December 2005 — With Saudi women holding 43 percent of shares in family-owned establishments, there is an urgent need for an institutional framework to ensure that women are not passed over in the chain of command at the behest of the dominant male partners.
A suggestion to this effect was made by Alia A. Banaja, chairwoman of 2-thepoint, at the “Forum for Leading Family Businesses to an IPO” organized by the BMG Financial Advisors. The forum concluded here yesterday.
Participating in the discussion on the “Future role of lady family members in public companies,” Alia said the “rules and regulations relating to succession in family-owned enterprises should be defined, since women hold 43 percent of shares in these institutions.”
She observed: “Problems relating to succession of women in the business families hierarchy started with men. An institutional framework for succession of women in the organizational structure can solve the problem,” Alia said, adding that three-fourths of businesswomen suffer from this problem. She suggested that the help of professionals should be sought for running family enterprises on sound principles.
She also called on the Saudi businessmen to recognize women’s rights in companies as shareholders, since women are highly educated and qualified to run their own businesses. However, in the absence of a well-defined institutional framework, “it is more secure for women to have an IPO rather than operate it as a family-run business. This way she can control her shares and exercise her right as a shareholder,” she told Arab News.
Speaking about her Jeddah-based company, Alia said: “I own the company along with my sister, while my father owns a company with his brothers. Mine is a computer company involved in the business of website designing, software programming and learning solutions. Ninety percent of my clients are men and ten percent women.”
Expressing herself against segregation of companies by gender, she said, “We need the experience of men, who have a rich and diversified experience. With the Kingdom’s accession to the World Trade Organization (WTO), there will be a lot of competition requiring certain rules to be changed. This will allow women to become board members. Already, there are indications that the government is changing the rules in the light of the new situation. This is encouraging more women to go into business instead of sitting at home.”
Dr. Aisha M. Almana, manager, hospital services, Almana General Hospitals, Dammam, said many women have been working unofficially without their formal recognition as members on the board.
“I got the permission to register my company last year, although I was not allowed to register my name as a board member. However, I could exercise all my rights unofficially,” said Aisha.
She added: “I had a detailed discussion with the deputy minister of justice. He said there is no problem in having a woman on the board if it is a family-owned enterprise. We then approached the minister of commerce and he formally allowed me to be registered as a board member,” Aisha told Arab News.
According to her, men dominate family business enterprises even though women may hold an equal number of shares. She observed that family-owned businesses are exposed to risks as the first generation of shareholders passes away or retires. The safety net lies in floating an IPO. “In future, family businesses will give way to joint stock companies,” she added.
Speaking to Arab News, Aziza A. Al-Khateeb, general manager, Riyadh-based Added Value, stressed the need for setting up a center for Saudi women that would enable them to develop leadership qualities. She said such a center was necessary, since competition would heat up in the wake of the Kingdom’s accession to the WTO. Over 200 family-owned enterprises belong to small and medium enterprises. As many as 48 out of the top 100 companies are family-owned establishments, she added.
