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Asharqia Chamber launches the activities of the second national forum for the sustainability of family enterprises
15/12/2022
Asharqia Chamber launches the activities of the second national forum for the sustainability of family enterprises
Al-Sulaiman: Family businesses represent 63% of the number of establishments in the private sector and contribute 66% of the sector's GDP
Al-Ruzaizah: Family businesses are a significant component of the corporate law

His Royal Highness, Prince Saud bin Nayef bin Abdulaziz Al Saud, Governor of the Eastern Region, inaugurated, on Wednesday, December 14, 2022 AD, the activities of the Second National Forum for the Sustainability of Family Enterprises, which the Asharqia Chamber organized in cooperation with the National Center for Family Enterprises, and witnessed a large presence from Family business owners, elite businessmen, local and international academics, experienced specialists and those interested in the field of the family business.
His Royal Highness, Prince of the Eastern Province, affirmed that the economic movement witnessed by the Eastern Region is part of the active movement experienced by the entire Kingdom, noting the generous support of the wise leadership for family businesses that are of great importance to the national economy and open up excellent job prospects for young people of the country.
During the forum, His Highness blessed the signing ceremony of a memorandum of understanding between the National Center for Family Enterprises and Thiqa Company. The CEO of Strategic Partnerships, Eng. Badr bin Abdullah Al-Omari represented Thiqa Company.
The main driver of the private sector
Dr. Ghassan Al-Sulaiman, Chairman of the Board of Directors of the National Center for Family Enterprises, said during his speech that the importance of family businesses in the Kingdom lies in the fact that they represent 63% of the number of establishments in the private sector and contribute 66% of the private sector's GDP and about 76% of employment. The private sector, therefore largely represents the main engine of the private sector in the Kingdom, and he pointed to the great interest that family businesses received during the era of the Custodian of the Two Holy Mosques and his faithful crown prince, where the royal directive was issued to reopen the National Center for Family Enterprises, which since its opening before Four years he achieved constructive and fruitful cooperation between him and the Ministry of Commerce and all relevant government agencies.
The transformational journey of business development
His Excellency said that we are working at the center on the sustainability of family businesses through solutions related to governance, the development of future leaders, and the empowerment of women as part of an integrated system of initiatives that drive the development of the performance of family businesses and raise their capacity for sustainability from one generation to the next.
He pointed out that the center seeks to make a transformational journey to develop its business and provide more services to the four stakeholders: family businesses, consultants, the public sector, and the community.
And he went on to say that, since the establishment of the center, there have been three goals that the center seeks to achieve. The first: is the sustainability of family businesses, the second: improving the representation of family businesses in front of decision-makers from government agencies, presenting the challenges faced by family businesses to try to come up with solutions for them, and the third: raising the contribution of family businesses. in GDP and employment.
For this part, the Chairman of the Asharqia Chamber, Badr bin Suleiman Al-Ruzaiza, stressed during his speech at the opening of the forum the importance of family businesses, which he considered one of the main factors driving the various economies of countries, pointing to what estimates indicate that family businesses are responsible for moving no less than 90% of the markets. This is not much different in the Kingdom, where family businesses occupy a large area and have their fingerprints and a leading role in the growth of the national economy, which made them on the list of visual targets.
And he went on to say that family enterprises were a major item within the new corporate system, which in turn provided comprehensive treatment for the challenges they face, which will be reflected in many benefits on their sustainability and referred to what the Ministry of Commerce provided them, whether the integrated guidance document that set a clear guiding vision for policies and mechanisms Ensure the smoothness and sustainability of it, or the establishment of the National Center for Family Enterprises, as it embodied an important step in strengthening the march of the family enterprise sector, achieving its goals and developing its business according to an institutional framework that supports its expansion and increases its chances of success.
National experiences in governance
In the first dialogue session, entitled (National Experiences in the Institutionalization and Governance of Family Enterprises), the participants stressed the importance of the developmental and legislative development of these institutions because of the importance they represent to the national economy and given that they occupy more than 60% of the private sector, on which the Kingdom’s vision relies. Therefore, developing the performance of these companies is part of the development of the private sector, which is one of the goals of the vision. Hence, the governance and sustainability of these companies are the governance and sustainability of the private sector, which is one of the goals of the vision.
Participants pointed out that some of the disputes that arise in family businesses may come from the succession or intersection of generations, and they may be financial disputes, but they may often be for psychological and social reasons, which come after the first generation, and may aggravate and later turn into financial disputes.

Participants called for the openness of family businesses to entrepreneurs, especially since all family businesses were pioneering companies by the founders who owned ideas and turned them into projects. which gives additional value to the company.
In this regard, they stressed the need for the governance process to be gradual, and for companies to continue, they should be transformed into financial companies, and if they are suitable and capable of being offered in the financial market, from here every company must have professional management.
New corporate system
In the second session, (entitled the New Companies Law and its Impact on the Sustainability of Family Businesses), the participants reviewed the provisions of the law and its implications for family businesses, stressing that it supports the paths of sustainability due to its comprehensiveness and its collection of all forms and types of companies, and its removal of a package of restrictions, whether at incorporation, practice or exit. And also on the names of companies and when trading, and that it came to support the regulatory environment for commercial and economic entities in the Kingdom in general, and to strengthen the legislative system for companies.
They pointed out that the law introduced an article that regulates family businesses, in terms of ownership, governance, management, work policies, employment of relatives, and distribution of profits through the conclusion of a family charter that is in the Memorandum of Association. The relationship between them or the company, including how their heirs enter the company, whether in person or through a company they establish for this purpose.
They emphasized that the new system provided an opportunity for family companies to include restrictions to the company's basic system to dispose of shares for a certain period or to require the approval of the company or shareholders before disposing of them, in addition to providing means for resolving disputes in companies by resorting to arbitration or other alternative means to settle them, and regulated a mechanism for practicing Recovering the share by one or more partners upon assignment, and allowing the company to buy it, and the procedures for that, and intentionally motivating family companies to turn into joint-stock companies by deciding that the shares should be from those who are related by kinship or lineage to achieve sustainability and sound governance.
family business challenges
In the third session, titled (Challenges of Family Businesses), the consultant at (Pwc), Amin Al-Nasser, reviewed the results of an opinion poll conducted by the company on the challenges of family businesses and showed that family businesses face several challenges, most notably: weak founding spirit when the founders are absent, and weak The competitiveness of incentive systems compared to the labor market, the overlapping of the family dimension with the investment dimension, as well as the weak degree of transparency and governance.
Nasser said that it is necessary to know the challenges facing family businesses and search for appropriate solutions for them, and about the most prominent concern among family business owners, pointing out that the survey showed about 66% of the participating family businesses agree that skills and capabilities should be evaluated, and about 53 % of them confirm that succession is the main issue, and about 44% say that professionalism is a challenge, and 72% intend to tackle this challenge over the next two years.
The survey showed that 88% of large family businesses plan for executives to improve profits and stay competitive, despite the changing economic environment, which is the number one challenge for 78% of those surveyed.
Nasser pointed out that each family needs to have a clear vision and strategic plans that go according to it to achieve success, and for everyone to be committed to that, pointing out that conflicts in families always exist, but the secret lies in managing this conflict not only for the continuation of work but for the survival of family and its solidarity.

Sources of conflicts and their management
In the last session, which was entitled (Sources of Conflicts and Their Management in Saudi Family Establishments), during which KPMG reviewed the most common mistakes that lead to disputes in commercial families, including the decision to appoint the eldest son without documenting the decisions taken, and the formal and informal integration of the owners. The undisclosed confidence that the eldest son would have complete and indisputable control, the mixing of company assets and personal assets in ownership documents, in addition to not updating the articles of association in limited liability companies, as well as hiring family members without developing a specific form for appropriate evaluation, as well as mechanisms for dividing Inheritance between heirs without the assistance of a lawyer.
The paper suggested some appropriate solutions to the challenges, including: If none of the methods succeed in resolving the conflict between family members, it is useful to look for the intervention of a third party, and the external parties can be neutral family members who are accepted by those in a state of conflict. , non-family trusted advisors, professional mediators, family business advisors, or arbitration centers.
Governance and alternative financing solutions
Asharqia Chamber and the National Center for Family Enterprises had anticipated the opening of the forum with two workshops, which witnessed a remarkable presence of specialists and interested persons. In the first workshop held entitled: Alternative Financing Solutions for Family Businesses, the founding partner of Dinar Investment Company, Dr. Omar Al-Manea, said that the financial sector development program within the Kingdom’s Vision 2030 AD revolves around its role in developing a diversified and effective financial sector, to support the development of the national economy and diversify sources of income. And stimulating savings, financing, and investment, through the development and deepening of financial sector institutions, and the development of the Saudi financial market to form an advanced financial market, in a manner that does not conflict with the strategic objectives to maintain the stability and strength of the financial sector.
Al-Manea explained that the program aims to increase the number of financial technology companies from 10 companies in 2018 AD to 230 companies in 2025 AD, as the number of financial technology companies reached 147 companies in the first half of 2022 AD.
Regarding the various means of financing, Al-Manea indicated that it is important for the financing applicant to choose the appropriate financing mechanism based on several factors, the most important of which is the company’s maturity stage with a focus on searching for refinancing, pointing to the promising role of debt markets, which is represented in the issuance of Sukuk, which is the optimal financing option. For medium and small companies, as it does not reduce the ownership shares of financing applicants, as is the case if the financing applicant tends to raise capital, and is distinguished by its ability to extinguish the Sukuk by issuing a new Sukuk without exhausting the company’s cash flows.
While the second workshop was reviewed, entitled (Governance in Family Businesses), in which a member of the Board of Directors at BDI, Bassam Asiri, the consultant Adeeb Rashid, and the managing partner at the Business Family House for Management Consulting, Dr. And legal advice, Dr. Adly Hammad, that governance should start from the owners first of all, so that their relationship is separated between them, and then the corporate governance comes, stressing the importance of separating management from ownership.
The speakers pointed out the need for the owners to have a culture of dealing with the differences that may arise at any time between the owners, pointing to the importance of identifying obstacles and challenges to achieve the continuity of the family business, stressing that governance sets principles and standards for dealing with owners and their relationship with the board of directors and employees and emphasizes the principle of justice Roles, the importance of the family charter and its role in drawing the road map for the family, and they agreed on the importance of training and developing the next generation by subjecting it to several specialized training courses, especially in issues of governance and succession, so that they can later lead the company and contribute positively and effectively to the continuity of its business.
Asharqia Chamber launches the activities of the second national forum for the sustainability of family enterprises
13/12/2022
It will be opened by His Highness the Prince of the region, and experts and specialists will participate in it
Asharqia Chamber launches the activities of the second national forum for the sustainability of family enterprises
His Royal Highness, Prince Saud bin Nayef bin Abdulaziz Al Saud, Princ of the Eastern Region, will inaugurate, on Wednesday, December 14, 2022 AD, the activities of the Second National Forum for the Sustainability of Family Enterprises, which is organized by the Asharqia Chamber in cooperation with the National Center for Family Enterprises, and a group of experts specializing in governance will participate in it. Finance and sustainability of family businesses, they discuss through five sessions the national experiences in the institutionalization and governance of family businesses, the new corporate system, and its impact on the sustainability of family businesses, by highlighting the system and its provisions that support the sustainability of family businesses, as well as reviewing the results of an opinion poll conducted by (Pwc) About the challenges faced by family businesses, as well as their discussion of the sources of conflicts and their management in family businesses in the Kingdom.
The Chamber had preceded the opening of the forum with two workshops on alternative financing solutions and governance in family businesses, during which the speakers discussed the most prominent financing solutions for family businesses and the returns from resorting to them, whether on the spread, expansion or sustainability of the business, as well as the implications of applying governance in family businesses from organizing the process Succession of generations and employment of children of the royal family in the company.
His Excellency the Chairman of the Board of Directors of the National Center for Family Enterprises, Dr. Ghassan Al-Sulaiman, stressed the importance of the existing partnership between the Center and the Chamber, as it aims to provide services and technical assistance for the advancement of this vital sector.
His Excellency said that the family business sector needs to hold a lot of major forums, seminars, and specialized workshops constantly, which help to clarify the danger and reveal deficiencies in the management of family businesses, which often lead them to the conflict zone, which is a very dangerous area that causes the collapse of major commercial entities.
He stressed the importance of family business members, especially the new generations, undergoing continuous training that helps prepare them to lead the family legacy and continue achieving and developing gains through implementing the principles and requirements of governance, stressing the keenness of the state to continue the business of these companies and protect them from collapse to enhance the strength of and the strength of the national economy.
He also explained that the Center, in partnership with the Chamber, is trying to uncover shortcomings and ways of success for the leaders of the sector, by holding this important forum that highlights the issue of sustainability and renunciation of conflicts, in which many academics and experts in the field of governance and family businesses participate, as well as those with successful experiences so that you can rest Family business leaders extract lessons learned from these participations and develop their model for their companies, which helps them overcome the dilemma of disintegration and collapse, and develop the performance of their products.
The Chairman of the Asharqia Chamber, Badr bin Suleiman Al-Ruzaiza, said that the forum represents an extension of the chamber's efforts to support family enterprises, and sends a message of the importance of establishing the concept of sustainability in all its contents in family enterprises, which represent a major axis in the national economic system, and indicated that the forum discusses side His review of successful experiences in achieving sustainability, the challenges of the family business, such as managing the succession of generations and institutionalization and showing the best and most recent ways to overcome these and other challenges.
Al-Ruzaiza stressed that the state, within the framework of achieving the goals of Vision 2030 AD, is moving towards a new era of a prosperous and diversified economy by emphasizing the importance of the private sector in which family businesses represent the largest share, and the roles it can play in building access to a solid and competitive economic base, pointing to That the family business needs more ideas on overcoming its challenges and diversifying its directions for sustainability, in order for these rich businesses to achieve a tangible and sustainable participation in the national economy, stressing that this forum aims to contribute to addressing the challenges and provide scientific practices in the sustainability of the family business, and that and other things that it offers The Chamber includes programs, initiatives, and educational publications, all of which come in order to achieve its goal for family business owners to adopt governance procedures, because of the great benefits that accrue to the family business and the national economy, whether in terms of increasing its contribution to the non-oil GDP or in terms of absorbing thousands of forces national work.

Asharqia Chamber launches the activities of the second national forum for the sustainability of family enterprises

Asharqia Chamber launches the activities of the second national forum for the sustainability of family enterprises