Family business risks come under ASF focus

DUBAI - Family businesses are facing many challenges and they should take serious actions to face those challenges, according to experts who spoke at a workshop to highlight the future of family business in the context of free trade.

By A Staff Reporter

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Published: Thu 16 Dec 2004, 11:11 AM

Last updated: Thu 2 Apr 2015, 11:48 AM

The workshop held on the second day of the Arab Strategy Forum featured Faranak Foroughi, Head of Private Banking, National Bank of Dubai; Naguib Sawiris, Chairman & CEO of Orascom Telecom; Robert Douglas Dowie, General Manager of National Bank of Dubai; and Samir Al Ansari, CEO of Dubai International Capital.

“The history of family business says that 66 per cent of these companies fail to continue their business as the second generation of the family takes over. The reason is the lack of a clear future vision or policy that helps sustain the business in the long run,” Dowie said.

Foroughi outlined several actions that families should take in order to ensure the success of their business and stressed the importance of self training and updating one's self with the latest aspects in business and administration and establishing a board that comprises family members to manage the family business according to the best criteria of development.

According to Foroughi, the feeling of being a family member gives them a strong sense of pride which in fact encourages them to develop their businesses and maintain its success. Foroughi also stressed on the importance of having high levels of transparency for maintaining the success of family business.

Naguib Sawiris expressed his apposition to family-run businesses as it makes the decision-making process hard for the manager of a company who has to deal with the existence of many shareholders. On the other hand, if one person owns the company only, it will be easier for this owner to take decisions, especially if those decisions are bold and risky.

Samir Al Ansari said that the existence of well-known international businesses and companies and the new business aspects that have emerged from globalisation and the changes that came along with it, constitute the major threats the family businesses are facing.

Al Ansari called for family businesses in the Arab world to learn from the examples of leading international family business, which have maintained their success from one generation to another.



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