FROM LEFT- Rupert Copeman-Hill and Ahmed Abu Sharkh. Pic: Qassim Rahmatullah. The Peninsula
Doha: With challenging times ahead, it is crucial for Family Businesses in Qatar and around the region to focus on good governance, look at their corporate structure and review their succession plans.
The world has changed over the past two years and most recently,oil prices have impacted the regional economies significantly. It is now more important than ever for GCC Family Businesses, to plan well for the future, three top experts told The Peninsula in an interview.
The size of family assets in Qatar is significant. And more than half of GCC Family Businesses are currently planning succession from the second to the third generation. This can be a complex stage in the business cycle.
“Family Businesses need to assess where they are now and where they want to get to and it is very important for owners and management to have a clear, implementable plan in place to face the tough times ahead. Good governance creates a solid foundation for good decisions and maintaining sustainable business activity and we are increasingly seeing family business seek to adopt best practice and prepare for the next generation.” Ahmed Abu Sharkh, Country Senior Partner at KPMG in Qatar said.
With the oil prices plummeting to record lows, the GCC’s $100bn-valued family businesses are facing liquidity issues, impacting revenues and cash flows. Managing these challenges will take planning and specialist skills, Ahmed added.
“During these tough times there are no substitutes for good planning and preparation, implementing good governance practices and robust legal documentation. Corporate structures need an update in terms of the family constitution and shareholders agreements. With concerns over further falls in oil prices , this is a very good time to reveiw your business, its structures and assess if they are fit for the current climate”, noted Rupert Copeman-Hill, Partner at international law firm CharlesRussell Speechlys.
Going public is an option for the Family Business in terms of expansion plans, especially when there are growing concerns about liquidity issues. There is a growing trend, at least in the UAE, for more and more families going public. There has been a 19 percent increase in the last 18 months in IPOs in UAE, Rupert said.
There is so much change occurring in Family Businesses in the region, with far reaching global economic and political upheaval as well as strong international competition. This is the right time for the family members to plan for the future said John Taylor, Business Development Director, CharlesRussell Speechlys, Middle East.
