• "KPMG" discusses six challenges in front of the continuity of the growth of family businesses


    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.

© All Rights Reserved for Asharqia Chamber