Pearl Initiative and EY sign pact to boost governance in GCC family businesses

They will conduct an annual survey covering themes such as business, succession, ownership and philanthropy

Family businesses play a key role in GCC economies, employing about 80 per cent of the workforce. Sarah Dea / The National

The Pearl Initiative, a non-profit organisation focused on promoting corporate governance in the GCC's private sector, has signed a multi-year initial agreement with consultancy EY to support family-owned businesses in the region.

The entities will jointly publish an annual Family Business Governance Snapshot Survey and collaborate on various activities to advance governance in family-owned companies, the Pearl Initiative said on Wednesday.

The survey will cover themes such as governance, business, succession, ownership and philanthropy.

The partnership will “create valuable research that will enrich the family businesses ecosystem with insights into the latest regional trends of corporate governance amongst family firms”, said Yamama Al-Oraibi, chief executive of the Pearl Initiative.

“Building on our work together, we will create impactful programming that will strengthen governance within regional family firms, as well as empower NextGen [the next generation of] leaders to lead and grow their family enterprises.”

Family-owned businesses play a key role in GCC economies, employing an estimated 80 per cent of the region’s workforce and contributing about 60 per cent to its gross domestic product.

Countries such as the UAE have been taking many steps to support family businesses to expand and adapt.

In September last year, the country launched the Thabat Venture Builder programme that aims to double the contribution of family-owned businesses to the nation's gross domestic product to $320 billion by 2032 by preparing them for the future economy.

The programme aims to transform 200 family business projects into major companies by 2030 with a market value exceeding Dh150 billion ($40.84 billion) and annual revenue of Dh18 billion.

The Dubai International Financial Centre also announced the creation of the Family Wealth Centre last August, in a push to double the sector’s contribution to the economy by 2030.

Last month, Dubai Chambers also set up a dedicated centre for family businesses to help them to navigate challenges such as succession planning.

All family businesses in the emirate, regardless of their size or the volume of their turnover, will be able to avail services offered by the Dubai Centre for Family Businesses, which aims to make corporate governance an integral part of growth and continuity strategy of family owned private companies.

The new laws issued in the UAE and Saudi Arabia to support the sector highlight the importance of family business leaders working alongside experienced professionals in business advisory and consulting, said Anthony O’Sullivan, UAE managing partner at EY.

EY's collaboration with the Pearl Initiative “will provide family businesses [with] the support they need to achieve long-term sustainability and success”, he said.