Family business Governance Code

Family business Governance Code

Like in many other parts across the world, family businesses play the crucial role in the GCC economy, representing over 70% of its private sector. And like everywhere else, the biggest challenge for the GCC family businesses is survival. It is where the governance norms and instructions become essential.

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Like in many other parts across the world, family businesses play the crucial role in the GCC economy, representing over 70% of its private sector. And like everywhere else, the biggest challenge for the GCC family businesses is survival. It is where the governance norms and instructions become essential.

In order to support the family business in their growth and development, the Family Business Council – Gulf (FBCG) in partnership with FBN International and in collaboration with 10 leading regional and international governance experts, among them Alexander Koeberle-Schmid, from KPMG in Germany, released in May 2016 the inaugural GCC Governance Family Business Code.

Bilingual in English and Arabic, this report is designed specifically to help Gulf family businesses to develop governance systems. The document provides a set of family business governance best practices, as well as rules and procedures for the governance system to work effectively.

Why now?

The family business market in Gulf faces an interesting time. The economy of the region is evolving and becoming even more complex. The family business market is also transforming with most of the companies passing from the first to the second generation in leadership and ownership. The companies are growing in size adding more next generation family members, meaning an increasing numbers of shareholders and family members involved in the business.

Governance issues are crucial: developing and implementing of governance structure in forms of rules, policies and procedures become the key solution for the owners to manage the growing business.

GCC Family Business Governance Code

The launch of the first of its kind GCC Family Business Code is of a special importance for family businesses in the region. While in many other countries across the world corporate governance codes specific for family businesses have already been implemented – mostly in Europe and Americas – they are very limited in the MENA region.

This Code taps into the need for a comprehensive governance guide for GCC family businesses, addressing a wide range of governance areas: family governance, ownership governance, corporate governance, wealth governance, public engagement and succession planning. The Code also contains some communication standards and systems, procedures for the integration of the next generation, and dedicated guidance into the auditing standards.

Family business blog

We hope that by sharing our experiences and other peoples’ stories, we can help family businesses prosper, and reach their full potential.

 
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