Keeping it in the family
What does the future hold for family businesses in the Middle East?
Research has found that family businesses score better than others on crucial indicators of long-term corporate health – but, sadly, only a third of family owned businesses survive to the third generation, with a mere 3% making it to the fourth generation. Since most businesses in our region involve family members, we think this is a topic of interest for our readers.
For most family businesses it is extremely difficult to reach IPO stage as most lack good governance procedures. This shortcoming was one of the major issues highlighted at a recent Arab IPO Summit, at which our magazine was media partner.
The future of these businesses starts to become unclear and ‘at risk’ upon the death of the founding generation; companies that haven’t thought about this inevitability would find themselves in total turmoil. Many also suffer the pressures of family disputes, in particular when the founders were siblings. Often children or relatives will disagree, and this causes pain and unhappiness, especially if there is no succession planning in place.
To read more pls read the printed version of our magazine, issue 12