Guiding hand in family boardrooms

The economic crisis is causing a growing number of family-owned businesses in the Gulf to seek outside help to draw up family constitutions and formalise internal governance structures, experts say.

The global downturn has given companies time to “sit back and think”, says Andrew Hope-Morley, a director at HSBC Private Bank, while the high-profile problems of two prominent Saudi groups – Ahmad Hamad Algosaibi & Brothers and Saad Group – have given some additional food for thought.

The two groups’ problems have raised questions about internal controls at family companies and the lending practices of banks that have provided facilities to the region’s prominent businesses on reputation alone.