A regional association of family business has come up with a voluntary governance code which it hopes will help businesses plan for succession.
“Succession planning is critical to family businesses in the region and without strong family and corporate governance procedures in place the future of businesses in the region will be at risk,” said Abdul Aziz Al Ghurair, the chairman of the Family Business Council-Gulf, the regional association of Family Business Network International.
Mr Al Ghurair, who is also the chief executive of Mashreq, said that family businesses account for on average 70 per cent of businesses in the Gulf but that he was principally addressing the largest 40 companies that are family-run.
According to a study undertaken last year in conjunction with the consultancy firm McKinsey, many family businesses have weak corporate governance, with only 44 per cent having an employment policy in place and with only 32 per cent of polled businesses having clarity on roles and responsibilities.
The code includes checklists on what businesses should plan for. It was conceived with the help of 10 regional and international governance experts.
“We have taken best practices from across the world and applied our local GCC wisdom to create a governance code specific for our region,” Mr Al Ghurair said.
“While each family may have different visions and goals, the GCC Family Business Governance Code, just like the astrolabe, can serve as a common compass to help family businesses navigate through their own process and reach their true north.”
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