13/03/2017
In a workshop held by Asharqia Chamber
The workshop "Family businesses and the challenges of growth and
sustainability," held by Asharqia Chamber Concluded on Monday, March 13, 2017 in collaboration with KPMG, a company specialized
in tax and consulting, that the absence of replacing plans for career and
succession of family business would stimulate the emergence of a leadership
dispute among the members of the successive generations, which leads to the
fluctuation of the business and the possibility of its collapse, and stressed
that the workshop is not necessary to fill the top positions in the family
business with family members, but while they were those who meet the necessary
competence and experience.
He
stressed that the KPMG team work, in the workshop, which witnessed a remarkable
presence of the of families in the eastern region companies and a number of
specialists and those interested in the topic of the governance of family
businesses, the importance of attracting expertise in business management and
family, being supported by a growing activity and motivate the culture of
creativity and being more occupational in
the company business management, as well as the possible occurrence of
accountable activity management as if they were family members, thus increasing control over the company performance.
The
KPMG company team, has submitted a detailed presentation to more growth
challenges and the continuity of family businesses, pointing to six challenges,
on top of the challenges of replacement, which negligence and not to be treated
may be lost for many years of effort and development of the founder of the
family, noting the failure
to properly plan for the succession of the business is one of the main reasons
for the family business, stressing that addressing succession is the top positions
and improve new leaders who will manage the business, whether they are owners
of the activity or competent staff activity within the system.
The
second and third challenge came, according to a team of KPMG represented in the
entry of family members into the board of directors and the importance of
attracting expertise in family business management, arguing that companies in the
council is something that needs to be rewritten to be its reference chapter in
people minds between the ownership and management and
adequate in terms of specifications and leading position, and attract
expertise, noting to the challenge of those who wish not to give up top positions
in the management of the activity or those who thought up the costs of
attracting expertise.
The
entire KPMG Inc. team to attract expertise in family businesses, proved by
their observations of companies dealing with a diversity of ideas about unrealistic expansion of the companies in
proportion to economic development and change in the semi continuous structural
being run companies.
In
terms of the distribution of profits and conflicts as the fourth and fifth challenge
in front of the continuity of the family business, the four panelists, it
agreed that it is not necessary to dividend on an ongoing basis (annual) as
there are important considerations that must be taken into account before
approving the distribution of profits among them the
availability of cash, as well as the need for activity of liquidity in the near
term to support its growth and expansion, which contributes to increasing the
value of activity and improved profits, which is beneficial to the ones in
charge, due to conflict and competition between family members and also to the
different cultures and
the lack of structural existence, pointing to the need for recourse in the event of disputes to the channels of
conventional conflict solutions as individuals close to the family and the
family council and the Committee for mending fences.
About the sixth and last challenge a team of KPMG, pointed that the causes of
its occurrence is in the conflicts between family members and the desire for
independence as well as to stop or slow down the growth and profitability of
activity, stressing the need to open the chance to exit in an orderly and work activity
means professional and determine individual shares value, noting that the sale shares
internally, which does not have the right to sell to parties outside of the
family, by offering stocks to the existing owners and distributed in accordance with the
percentage of ownership in the activity or wishing to purchase.
In
conclusion, the of consulting family in KPMG companies
in Saudi Arabia, Fouad Shibra, appreciated the efforts of the Chamber
of Commerce in its continuous quest to raise the capacity of family businesses and increase their
awareness of the work within the governance framework, which is the main pillar
in maintaining the continuity of family businesses, being a basic pillar of the
national economy.
