A Harvard Business Review survey noted that nearly 90% of family firms have seen negative impact to their businesses as a result of COVID-19. As Gulf economies undergo financial and economic challenges brought on by the current global pandemic, family businesses can approach the situation on strong footing by proactively reacting to these changes.

Although the landscape is rapidly shifting, family firms have the opportunity to mitigate the adverse impacts on their businesses, through addressing these complexities from a long-term perspective. Business boards also have a vital role in providing strategic guidance through spearheading corporate governance best practices to secure the overall sustainability of the organisation.

This webinar discussed the impact the global pandemic has had on family firms and explore valuable strategies to keep abreast with imminent hurdles. In conversation with family business members, this panel used real life examples to demonstrate how family businesses have altered their larger operational activities. The webinar also explored how a robust governance framework and strategic direction from the board is valuable, especially during times of crisis.

What we learnt:

• The definition of governance has evolved in the region over the past decade. In the region’s early stages, family businesses would often host informal family council sessions – which should not be discounted for being anything less than a natural form of governance as well.
• There are some benefits that family firms are predisposed to – for instance, when the business needs to be reactive, being more agile (an attribute of many family firms) allows a family firm the ability to be  respond quicker.
• Governance requires leadership and ownership by numerous stakeholders and not necessarily one individual member or function of the family business.
• Family businesses should be cautious not to implement blanket governance policies to their organisations as the mechanisms cannot be used as a “one-size-fits-all”, but rather tailored depending on the unique circumstances and fabric of the family business itself.
• Family firms should be mindful that there are overarching macro-trends influencing their firms that should be reflected in and shape their governance structures accordingly.
• Even family firms that have a governance structure in place often do not maximise the benefits and advantages they can gain from it. Especially during a crisis, it is vital to think about whether the business is using its set governance mechanisms to their full extent by addressing and engaging its board and other key stakeholders.
• In time of crisis, Board of Directors are the core engines for family businesses in making sure that there is a clear and direct communication channel between the board and  management. For a long-term outlook, family businesses across the Gulf Region need to leverage the expertise, direction, and resources available to them by the Board.