GCC Family Business

Executive Summary

What is this report about?
Family businesses are the mainstay of the GCC economy and account for over three-fourths of the private sector. They are traditionally involved in trading, manufacturing, financial services, real estate and construction, and over the years, have diversified into other sectors. The single key feature of a GCC family business is the ownership structure, which takes the form of direct and complete family control and is characterized by a handful of senior family members influencing decision making. Concentrated shareholdings allow family business to take a long term view, at the expense of short term earnings or share price movements, and this has helped them survive the vagaries of the market. However, most GCC family businesses don’t have procedures in place to deal with issues of control and ownership, but as the company and number of family shareholders grow from one generation to the next, there is an increased potential for conflicts. Corporate and Family governance are also key issues that need to be addressed, to secure the long term health of the business as most GCC family businesses have little formal procedures.

Who will benefit and why?
The report will help family offices, policy makers, government institutions, academia, trade bodies, and investors to understand the trends in GCC Family Businesses. The report highlights why corporate governance and succession planning are the twin challenges facing family businesses in the region, and what needs to be done to overcome them.

How exhaustive is this report?
We have analyzed the major family businesses in the GCC according to sectoral presence and generational transfers. The report also highlights the impact of GCC family business on the regional economy, and elaborates on the challenges faced by them; especially, succession and corporate governance. In addition, the report also outlines the profiles of major family business groups in the Gulf, with a special focus on their philanthropic activities.