Thanks to limited international competition, high liquidity, and easy access to both capital and labour, many of the family-owned firms have been transformed from trading companies created in the 1970s, into conglomerates with interests in construction, retail, financial services, and the hospitality industry.
The quantitative data that CampdenFB aggregated is very interesting and well-displayed. More than 80% of the businesses are in the first or second generation, and female board participation is much higher than for other firms in the region. The biggest challenge seems to be corporate governance, and corporate governance committees are still rare. In addition less than one in four firms disclose their financial information.
This report gives a useful snapshot of the status of family businesses in this fast growing region of the globe. The challenge for the governments in the region is to shift the economic base from government-controlled firms in the oil and gas industry, into broader private sector enterprises, which will be largely led by family businesses and entrepreneurs.
Taking over the family business
An interesting development, in my opinion, is that many second generation family members are coming back to the region to take over the family business after a strong education in the western world and professional experience in multinational companies. This may have, in time, a profound impact on the goals, strategies and practices of family firms in the GCC countries.
For the full report, check out CampdenFB’s GCC Family Businesses infographic.