DIFC’s Knowledge Series Seminar Discusses How Regional Family Businesses Can Sustain and Expand their Growth

The Dubai International Financial Centre (DIFC) today hosted a seminar to discuss how family businesses can sustain and enhance their growth in the current economic environment.

Titled ‘Creating Sustainable Family Businesses in the Middle East’, the seminar was the eighth event in DIFC’s Knowledge Series, a regular series of seminars organised by DIFC on key financial industry issues. Senior officials from the DIFC Authority, the Dubai Financial Services Authority and global consultancies spoke at the event.
 
Abdulla Mohammed Al Awar, CEO of the DIFC Authority said: “Family businesses constitute the heart of the region’s economy. To help family businesses negotiate today’s economic challenges and take better advantage of new business opportunities; DIFC has created a platform for families to establish dedicated Family Offices. We have created specific regulations to enable family businesses to set up holding companies at DIFC for managing their private wealth. Such resources are critical to family-run institutions in negotiating the critical challenges they face in sustaining and growing their business in today’s economic environment.”

Dr. Nasser Al Saidi, Chief Economist of the DIFC Authority said: “Family businesses, which account for some 90% of businesses in the Middle East, have a major role in the region’s growth, job creation and competitiveness. Their sustained success is key to the region’s long-term economic development. As family businesses deal with the challenges posed by the financial crisis, increased international openness of the Gulf region as well as their own expansion, they need to adopt newer ways of running their business and managing their wealth in order to remain competitive and sustainable. Most importantly, family businesses need to put in place strong corporate governance and succession planning frameworks. The DIFC and the Hawkamah Institute for Corporate Governance have now put in place a toolkit of practical solutions to address these challenges.”

One of the special focuses of Knowledge Series 8 was philanthropy, which for many family businesses is a means of expressing one of their deepest values - ‘giving back’ to the community. A session focused on philanthropy led by Geneva Global, the world's leading international philanthropic advisor discussed ways in which family businesses can maximise the impact of their philanthropy.

Warren Lancaster, International Director and European Advisory Director of Geneva Global said: “Giving philanthropically is an investment often aimed at reducing poverty or creating prosperity among economically disadvantaged people.  The difference you make will be greater if supported by advice from specialists in the field.  Geneva Global is among the world’s leading advisory service providers in international philanthropy. We offer a full suite of consultancy services including guided travel to see first-hand the achievements made possible through philanthropic investments. Today, we've helped over 70 clients invest around $100 million in international grants, which has helped improve the quality of life of more than 15 million people.”

Another major issue addressed at the event was business continuity. Amin Nasser, Partner – Business Advisory Services, PricewaterhouseCoopers said: “The two greatest threats to the continuity of family businesses are conflict and succession. Conflicts in family businesses are rarely caused by poor business performance; mostly, they arise because owners feel that their needs are not met. Conflicts also surface when situations are unclear or not properly understood. The management of conflict is the key to the cohesiveness of both the business and the family. Family businesses are increasingly creating formal conflict resolution mechanisms, which provide a forum where the family members in dispute can air their differences and hopefully resolve the issues in an amicable way. However, in family businesses, emotions are sometimes quite high, which makes it difficult to resolve issues in an effective way.”

Session topics at the Knowledge Series event included Families and Governance: Lessons Learned; Structures and Solutions for Family Planning; Philanthropy: Inspiration, Information and Metrics; and Experiences of UAE Families.