"Good Governance" is the choice of family businesses to continue with the succession of generations
A workshop organized by the Asharqia Chamber in cooperation with the National Center for Family Enterprises emphasized the effectiveness of "governance" in the sustainability of (particularly family) companies by ensuring the application of integrity, justice, and transparency. It noted the pivotal role of boards of directors in implementing good governance to achieve its desired goals.
The workshop that was held recently and entitled "The Role of Board Members in the Governance and Sustainability of Family Businesses" was based on the definition of governance in the general framework, as: "An administrative and financial control system for the company, which includes a set of rules that regulate the relations, rights and duties of each of the owners The capital, the chairman and members of the board of directors, and the interested parties in the company."
In this regard, Dr. Muhammad Sadiq (Member of the Board of Directors of the Governance and Administrative Compliance Company), who was one of the speakers in the workshop, says that corporate governance: “is the rules for the leadership and direction of the company, which include mechanisms to regulate the various relations between: (the board of directors, executives, and shareholders, and stakeholders) by setting special rules and procedures to facilitate the decision-making process, and to impart a character of transparency and credibility to it, to protect the rights of shareholders and stakeholders, and to achieve justice, competition, and transparency in the financial market and the business environment.
Sadiq believes that governance in family businesses takes a similar picture to what is the case with companies, in terms of being a set of rules and procedures that help protect rights,” to include “the founders as well as the rest of the family with stakeholders, in addition to protecting the rights of stakeholders such as workers and customers.” and suppliers in a way that ensures the continuity and growth of these companies from one generation to the next.”
Accordingly, Dr. Sadiq believes that governance, as a culture and a method for controlling the relationship between the owners, managers, and dealers of the facility, mostly depends on controlling the relationship between the owners of the facility, those who manage it, those dealing with it and the surrounding environment through specific mechanisms based on good structuring, organization and defining powers Review and audit, transparency and disclosure, equal assistance between partners, and compatibility with stakeholders with the facility.
The Director of Business Development and Strategic Partnerships at the National Center for Family Enterprises, Naim Al Sharab, said that governance provides the regulatory framework through which the company can define its goals and determine how to achieve them, and ensures the fair supervision and voting process that ensures full disclosure of all material facts and enables shareholders to Exercise their ownership rights, thus reducing the risks related to financial and administrative corruption.
Al-Shurrab emphasized that governance includes the board of directors in any company, and this board is a group of individuals elected by the company’s shareholders to oversee the management of this company. The board members meet periodically and take legal responsibility for the company’s activities.
Accordingly, Al Sharab says: The board of directors must meet periodically to perform the tasks and responsibilities, including discussing important issues related to the company’s performance and management, provided that the number of these meetings ranges between 6-4 meetings as a minimum annually, other than emergency meetings to discuss urgent issues, Provided that decisions are taken during the meetings of the Board by a majority vote of the attending members.