Shedding light on governance practices in family firms
A year ago, when we first came up with the idea of interviewing family firms across the GCC about their governance practices, we got a few skeptical comments from people (admittedly non-experts in this area) who believed that family firms would not speak to us openly about these matters. I’ve always believed that just because something that’s important appears hard or daunting, at first, is no excuse for doing nothing! A year on, we have carried out face-to-face interviews with over 100 leaders of family firms right across the GCC and have found them to be very supportive and open, in response to what we’re doing.
One key factor is that the interviews have been conducted on a completely confidential basis – the firms included will not be referred to on a named basis.
We are analyzing all the data gathered in order to produce insight, at the aggregate level, of where we are in terms of the implementation of governance practices in family firms in the region. There is generally data available in these areas on listed companies, due to requirements for them to disclose key corporate governance information. But there is currently much less information available on corporate governance thinking, priorities, issues and implementation in family firms.
Because there is clearly a transition in corporate governance thinking going on in family firms generally within the region, as leadership transfers across the generations, we sense an interest amongst family firms to understand where they sit on the curve of transition versus the sector generally. Also, we sense an increasing confidence and willingness to share practical insight and information on topics not viewed as too confidential or competitive.
The results of this research programme will be launched in January, and we hope that it will raise awareness and understanding on governance issues, trends and existing practices amongst GCC family firms. We also hope to provide value to family firms in the region, through access to aggregate analysis that enables them to benchmark themselves, gain insight and further implement better practices!