The integration of the GCC bourses will pave the way for creating bigger money market required to serve the needs of the businesses, a leading businessman on Tuesday said.
Hamid Rashid Al Zayani, Chairman Alzayani Investments and one of the leading GCC family businesses in the region, believed the scanty sizes of bourses in the region would continue to restrict the scope for businesses across the board.
Al Zayani, who presents a paper on the day two of the conference titled Family Business Retreat which opens on Tuesday, said the integration of the bourses was seen as the first step towards European countries and the GCC as a region needs to follow that model.
For example, the chances of speculations, he said, can be minimized through integration of the GCC bourses that will also help in creating a bigger money market.
“Technically speaking, the absence of single bourse in the GCC is restricting the scope of the growth of the capital markets,” he added.
“You are talking about the integrated bourses to take care of the businesses and trading electronically which requires no trading floor,” Al Zayani said, while quoting the example of NASDAQ.
Defending the family business model he said the common perception that the emerging wave of creating public listed culture in the world perhaps is still irrelevant in this part of the world.
“We don’t have adequate sizes of bourses to offer the desired services if most of the family businesses want to go public,” he added.
“Family businesses have created a very good succession plan as each fresh graduate in the family has to undergo on job training for three years to understand the business model, ethics and overall culture of the business.
This process of training in return, he said, helps in equipping and enabling the young generation to take on new challenges of their practical life. The second generation, he added, during the similar process plans retirement at the age of 65 so they can enjoy their wealth, family life while still being active head of the family.
Al Zayani, who is heading a family business, said the succession system also pave the way for the younger generation to play a crucial role in maintaining and enhancing the realm of family businesses.
Highlighting the importance of rules of business, governance and constitution in the family run businesses, Barbara R. Hauser said that family can create its own decision-making rules.
Hauser, chairman, Barbara Hauser LLC, USA, discussed vital aspects of the models of the family businesses and how these businesses could quickly transform into dynamic businesses.
“Each family is different and needs to create their own rules according to the requirements and needs of their businesses. However, a bespoke family constitution is essential as it helps the family sharpen their group-decision making skills. This reinforces a stronger family governance system.”
“An advisor can guide your family through the process and provide options the process, and provide option,” she said.
“When the family works together to create its own family constitution…the process itself is a way to develop their peer group decision-making skill. If it is just a set of outside forms or documents, it does not really become a part of the family,” she said.
“When the family works together to create its own constitution by creating a new set of business rules and to follow those rules practically,” she said.
“A good family governance system builds on that family’s own history, culture visions and culture, visions and aspirations,” she added.