A new set of Governance Guidelines has been issued to support family-owned firms and assist them to design and develop governance frameworks that will ensure a smooth succession process and continuity of business.
The guidelines came from the Dubai Centre for Family Businesses, operating under the umbrella of Dubai Chambers.
The move is part of a comprehensive scheme approved by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, during Dubai Council’s fifth meeting in May 2022, with the aim of supporting systems and processes that ensure sustainability of family businesses for at least the next 100 years.
Best practices
The guidelines draw upon international best practices that have been adapted to reflect local needs. Their publication comes as part of a comprehensive project the Centre is implementing in collaboration with Dubai Chamber of Commerce and the Dubai Government.
The Governance Guidelines offer detailed advice on the value of developing a Family Constitution – also known as a ‘Family Charter’ or ‘Family Protocols’ – together with practical tips, tools, and insights to support business-owning families in establishing effective governance structures.
Sustainability of family businesses
Abdul Aziz Abdulla Al Ghurair, Chairman of Dubai Chambers, commented: “The issuance of the new family business Governance Guidelines represents another important step forward in ensuring the sustainability, growth, and continuity of family businesses in Dubai. The principles outlined provide a comprehensive and integrated vision that will help companies develop effective strategies for a smooth transition of leadership between successive generations and promote the concept of sound governance.”
Solid foundations
The guidelines and their accompanying tools aim to assist families with mapping the complex roles and relationships that define their businesses, as well as finding a healthy middle ground where complex issues can be discussed in an environment of trust and transparency.
The principles and recommendations included within the guidelines are also highly relevant for specialists involved in supporting family businesses in designing and adopting sound governance structures and practices.
Family-owned businesses make up approximately 90% of the UAE’s private sector and create a significant contribution to Dubai’s non-oil GDP, as well as employing a substantial proportion of the emirate’s workforce. Many family businesses in Dubai were established during the 1950s and 1960s and are expected to undergo a generational transition within the next five to ten years.
Dubai Chambers is committed to boosting the competitiveness of family businesses, protecting their interests, and investing in their leaders to ensure their sustainable future, recognising their vital contribution to the objectives of Dubai Economic Agenda D33, which aims to raise private sector investments in development projects to AED1 trillion ($270 billion) by 2033.
Sustainability and growth
Established under the umbrella of Dubai Chambers in May 2023, the Dubai Centre for Family Businesses is set to be the entity entrusted with ensuring the sustainability and growth of family businesses in Dubai, as well as developing the vital sector and enhancing its economic contribution, which, in turn, will support the emirate’s future development plans.
The Centre aims to support the family business community, enhance its ability to keep pace with global development, and establish confidence in the emirate’s business environment to promote sustainable economic growth.-- TradeArabia News Service
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