Women – the vital resource GCC family businesses should build upon
Basmah Omair is also an author of this article.
The story of GCC business development outside oil is mostly one of family businesses.
Family-owned companies contribute as much as 80 per cent of the GCC’s non-oil GDP. But as these businesses undergo management transitions from the founding generation to children or grandchildren, many companies are coping with crises of succession. As they plot a course forward, they should be prepared to tap into a vital resource: educated, experienced women in the family who are ready to make a contribution.
Al Sayedah Khadijah bint Khuwailid Center at the Jeddah Chamber of Commerce and Industry, in partnership with Strategy&, interviewed about 30 large families in the UAE, Saudi Arabia, Kuwait and Bahrain to better understand the challenges that women face in family businesses and the measures that will help them to progress.
As GCC governments take steps to bring women more fully into the economy, family businesses can build on this momentum and significantly increase their talent base.
However, to do so they must understand the differing views between generations and between men and women when it comes to challenges and priorities.
The priority issues for women are support from family members, training and technical skills, and work-life balance – but their male relatives do not always agree. For example, more than half of the women interviewees wished they were getting more support from male family members, but only 17 per cent of men believed that their lack of support was a challenge for women.
By contrast, half of male interviewees believed one of the top challenges for women in reaching senior management positions was limited social acceptance, while less than one-third of the women agreed with that statement.
Similarly, there is a disconnect between generations. For instance, many first-generation interviewees said that women would face significant difficulties in male-dominated industries such as oil and gas, construction or technology. However, only one-fifth of second or third-generation family members, both male and female, believed that the nature of the sector would affect women’s participation.
In addition to examining attitudes, researchers looked at the four primary roles that women are playing in family businesses now, to understand opportunities for growth.
In the first role, women promote family values and culture, whether by building relationships through social events or running family activity councils.
The second role, which along with the first is very common, involves women playing a prominent role in philanthropic activities, including the family foundation and the company’s efforts regarding social responsibility.
The third role, which is becoming more frequent, relates to corporate governance, with many women having seats on company boards through their family connections.
In the fourth role, women are engaged in daily business operations, with women taking senior roles as heads of business units and functions. Prominent examples of the latter can be found in the Easa Saleh Al Gurg Group in the UAE. The founder’s three daughters – Raja, Muna and Maryam Al Gurg – have director-level roles. Importantly, they have created Al Gurg Women’s Empowerment Forum to provide their female employees with opportunities to express their opinions.
Family companies can help women grow in all of these areas by capitalising on government policy that calls for greater economic inclusion of women.
A member of the first generation in one GCC family company made this connection explicitly, telling us that: “When national economic trends became more supportive of women’s employment, this reflected positively in our family business.”
This trend may explain why half of interviewees believe the severity of women’s challenges in family businesses will decrease in the coming years, at least slightly.
Three areas can have the most impact on women’s prospects, and should be a focus for government and business leaders – education, participation and succession.
First, women need training designed to prepare them for roles in business, to complement their strong track record in higher education. For instance, nearly half of female interviewees cited a lack of financial skills as one of their key challenges. What governments can do is act as the sponsor and promoter of training in the critical fields of corporate governance, financial literacy and business acumen. For their part, the heads of family companies should develop hands-on training and corporate internships.
Second, governments and family business leaders can work to bring women’s economic participation rates in the GCC, currently at less than one-third, up to the four-fifths level common in most developed countries. Quotas for women on corporate boards could help, but it is important for governments to ensure first that enough women are able and willing to take such roles. Meanwhile, family business leaders can help women gain skills and experience via mentoring, career coaching and entrepreneurship or employment opportunities in other firms.
Third, many GCC family businesses are already examining how to manage the looming succession to the next generation, and establishing adequate family and corporate governance frameworks. The transition can provide opportunities for women to take more active roles in the family business, particularly on family councils or through developing programmes to integrate more female family members across the organisation.
Aside from the specific measures listed above, the most important thing that family business leaders can do is to encourage an honest and direct discussion of women’s involvement in their enterprises.
As women inherit portions of the family business, as well as gaining educational and professional experience inside the company and elsewhere, they are likely to become active shareholders. By engaging talented women with the family company and channelling women’s interest and enthusiasm, families strengthen the business and themselves.
The authors: Fadi Majdalani, partner, Ramy Sfeir, partner, and Patrick Nader, senior associate, with Strategy&, and Basmah Omair, executive director of Al Sayedah Khadijah Bint Khuwailid Center.
Follow The National’s Business section on Twitter
Updated: February 11, 2015 04:00 AM