Roundtable discusses sustainable business practices in family firms

Business Bureau, Gulf Today

Pearl Initiative, the business-led non-profit organisation promoting a culture of corporate transparency and accountability in the Gulf region, and Tharawat Family Business Forum, an independent membership organisation dedicated to the innovation of family businesses, recently convened over 50 high-level family business heads and representatives to discuss the role of the board in driving sustainable business practices across family firms.

The roundtable addressed internal and external forces and challenges affecting family business boards as well as the macro trends driving the economic landscape and how family business boards will have to build and adjust their corporate governance frameworks and practices to enable continued growth.

Titled ‘Family Business Boardroom Dynamics’, the panel discussion, which took place at the Tharawat Space, Dubai, engaged participants in discussions around how global economies are rapidly evolving and disrupting traditional business models. Technological advancements are impacting disciplines, economies and industries across the board. In light of this, family firms need to equip themselves with effective pre-emptive contingency plans to address challenges that they will inevitably have to face.

Yasmine Omari, Executive Director of the Pearl Initiative, opened the session by stating, “As the backbone of global economies, family businesses drive job creation and create value both for their shareholders and stakeholders alike. However, global and regional mega-trends are disrupting the status quo and family-owned companies have to be ready to address what’s coming their way or ultimately face the consequences. Part of this responsibility is to have effective governance systems in place, and this includes ensuring the proper implementation of such frameworks. With this in mind, as part of our programme we aim to raise awareness and understanding surrounding common governance issues and grey areas for family businesses while also highlighting regional trends and existing best practices to encourage and incentivise the implementation of good governance in Family Firms.”

The panel, which comprised Najla Al Suhaimi, Board Member, Suhaimi Group; Amir Ahmad, Partner, Reed Smith; and Yasmine Omari, highlighted local examples of how to address the current challenges that are disrupting dynamics within a family business boardroom and how to overcome them. Farida El Agamy, General Manager, Tharawat Family Business Forum, moderated the discussion.

The roundtable was held as part of the “Boards of the Future” research project, a collaboration between the Tharawat Family Business Forum and the Pearl Initiative, examining how family business Boards of Directors can ensure the sustainability of their businesses.

Farida El Agamy commented: “Family businesses drive job creation and creates value both for their shareholders and wider society. Our joint project with the Pearl Initiative will capture current corporate governance trends across the family business landscape in the region, as well as identify and address the disruptive forces that are impacting their businesses and business models. This will enable us to explore the role of family business Boards of Directors in the present and the future and develop models and thought leadership to support the development of good governance across the region.”

The research collaboration is a part of the Pearl Initiative’s Governance in Family Firms programme, which focuses on the business case for long-term value creation through the adoption of optimum corporate and family governance practices in Family Firms. Family businesses generate approximately 80 per cent of gross domestic product (GDP) outside the oil sector, and only 15 per cent of these firms continue to create value after the third generation.

Founded in 2010, the Pearl Initiative is promoting a corporate culture of accountability and transparency as key drivers of competitiveness and sustainable economic growth across the Gulf Region. The organisation develops programmes and publishes regional research reports and case studies to promote the implementation of higher standards of corporate governance amongst business and student communities across the Gulf Region.

Prominent business leaders from across the Gulf Region formed the Pearl Initiative in 2010 to create a non-profit vehicle for the Private Sector to collectively take the lead in adopting higher standards in corporate governance, accountability and transparency to enhance business innovation, opportunity and value creation.

With over 40 regional and international partners, the Pearl Initiative brings together business, government and civil society decision-makers to share best business practices and to help maximise the economic opportunities available to companies within the region.