Succession tips for businesses



For more than 25 years, from Switzerland to Saudi Arabia, Barbara Hauser has worked with countless families on their succession plans. Her book, International Family Governance: A Guide for Family and Advisers, represents the fruit of her labours. Ms Hauser attended the Family Business Retreat in Bahrain to provide her expertise and present the book, which has just been translated into Arabic. Here are three key themes:

Stay flexible

Governance should be flexible and personal to the family. There will always be new challenges, both personal and professional, and it's important to remain open-minded. Although the constitution must be tailored to the family, employing outside help, including legal advice and a moderator, is recommended.

Control emotions

Realise that many family firms unwind due to personal conflicts. Communicate with the whole family at a very early stage and welcome new members into the fold.

Encourage co-operation

Have the family work on corporate governance together, including a constitution. Don't make the process exclusive. This approach leads to clarity and accountability.

Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

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