Saudi Gazette JEDDAH — Family-owned businesses contribute approximately 90 percent to the Saudi economy. However, challenges faced by such family-owned businesses range from finding talent, failure to distinguish management and ownership, and sustaining growth, among others. This was disclosed at the third edition of the annual "Family-Owned Business Forum" where business owners and experts discussed ways to overcome challenges and explore future prospects. The two-day forum, under the patronage of the Ministry of Commerce and Industry, discussed ways to prepare the next generations for taking over their family businesses, the challenges and obstacles of conflicts within family businesses, the legal solutions and legislation, sustainability, management, entrepreneurship, as well as corporate social responsibility. Founder and chief executive of Tomorrow's Company Mark Goyder noted that generating new business and new opportunities is also a challenge. "That leads to a focus on entrepreneurship, creating new ideas and new products that in turn focuses on the need to bringing in talent," he added. He further said family-owned businesses have several advantages that other enterprises might lack. "There are many examples where businesses that are not family businesses have been persuaded by shareholders to do a share buyback or increase dividends and then when a crisis hits, they don't have capital to fall back on. Family-owned businesses think more long-term and are more conservative. They also have strength of being a carrier of a culture business. All the evidence from various studies shows that a strong culture in a company is what enables it to survive in bad times." "Having a clear purpose and values is what builds a strong foundation for family businesses, many experts agreed. Values is the core of any business," said Maha Feteihi, member of the Board of Directors at Fetaihi Holding Co. who participated in a panel discussion on building future generations. "They should be the target and by implementing them, we will get more benefits. By having clear communication, clarity in collaboration, a constitution, and well-defined procedures that each member is engaged in putting these procedures together, values can be achieved in the business." Corporate governance plays a significant role in avoiding conflicts and failure to sustain a business, according to CEO of Sedco Holding Anees Moumina. "There needs to be a strong structure that separates management from ownership. Also bringing in people that are qualified to manage the company and are well experienced is important. If it's within the family, they need to train them. As generations grow, it's important to keep the connection between the business and the family," he told Saudi Gazette. He added, "it's important to not just pass on the wealth but to sustain growth. As the generations grow, there are more stakeholders. If you don't have a good corporate governance for a family business, the company can deteriorate." Mohammed Al-Aqeel, chairman of Jarir Marketing Company, said mitigating risk is needed to sustain growth of the business, where separating ownership from management is a must. CEO of Pharco Corporation Dr. Sherine Helmy focused on values building management, adding that quick decision-making is an outcome of well-run family owned businesses.
