Dubai: The Dubai Chambers has launched a special unit to help family businesses with best practices and cushion them against generational disruptions.
The Dubai Centre for Family Businesses will be the ‘voice’ of Dubai’s family businesses and will have a direct role in grooming the younger members in being ready to take on future challenges leading their companies.
The Centre will also launch four legal systems for the governance of these businesses, and establish a centre for settling disputes that could arise through arbitration and mediation.
This comes after a decree issued by Dubai to launch a Centre to exclusively support family-owned businesses.
The Centre was formally launched by Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance of the UAE, and President of the Dubai International Financial Centre (DIFC) on Friday.
“The family business sector reflects our vision for excellence and our commitment to pursue new opportunities to achieve success,” he said. “Ensuring a smooth leadership transition, preserving the family legacy, and strengthening governance are key priorities in our plans to preserve the fabric of our family businesses and prepare them for the future.”
The Centre will launch a program to create awareness about the legal infrastructure in UAE to ensure a smooth transition between generations and encourage them to adopt a family constitution that is inclusive of everybody.
“The size of the family business in the last 50 years has changed from small businesses to multi-billion dollar businesses,” said Abdul Aziz Al Ghurair, chairman of Dubai Chambers. “It is becoming more critical to ensure that the transition from the founder to the next generation becomes smooth and trouble-free.”
Dubai Centre for Family Business will ensure that they have the right corporate governance, proper succession plan and legal infrastructure which will allow them to manage and promote their business from Dubai.
Established as part of the Dubai Chambers’ organisational structure, the Centre will develop templates for family business-related documents such as family charters and succession planning templates for these companies.
It will also provide advice on procedures to launch family businesses, and propose solutions to challenges and obstacles they face with government and private entities as well as ways to deal with those challenges. The Centre offers approaches to coordinate with organisational units across Dubai Chambers to facilitate and organise their commercial operations for the benefit of both parties.
Furthermore, the Centre will organise and participate in events, exhibitions, and conferences in areas related to family businesses and family ownership, which contribute towards achieving the Chambers’ goals. The Centre will also prepare, study, and analyse the conditions of family businesses and family ownership in the emirate; and compile reports on them.
“The involvement of the next generation in a business is very critical,” said Al Ghurair. “Therefore they must be aware of challenges and opportunities available for their family business. So they’re prepared and ready to manage their father’s business.”
Local and international family businesses can register with the centre for free, irrespective of their size.
As per 2021 statistics, family businesses represent around 90 per cent of all private companies in the UAE, and they have made investments in diverse fields. Emirati family businesses have also achieved leadership and high competitiveness at the regional level, accounting for 25 per cent of the Forbes Middle East list of the 100 most powerful Arab family companies in 2021.
The Dubai Chamber is also launching an independent family dispute centre to hear the cases of businesses registered with the Dubai Centre, Al Ghurair said.
The facility will work with the government and federal departments to meet the legal needs of registered family businesses.
Al Ghurair also confirmed that the cases will be settled by arbitration. “We don’t want to see family disputes going to the courts because we respect privacy and we will give him that privacy.”
The Dubai Centre for Family Businesses will also engage registered companies with consultants to advise and help with corporate governance, and even take them from private to public. “Adopting good corporate governance will make it easy for them [family businesses] to transit into the public domain,” Al Ghurair said.
The Centre’s programmes also include a series of educational sessions on UAE laws and top governance practices, which play an important role in succession planning in family businesses. The sessions will answer the question of how these companies can benefit from establishing governance and embedding its application throughout their activities.
The sessions will also spread awareness and educate the family business community about the need to establish a strong governance system and acquire more knowledge about the requirements for implementing governance. In addition, they will raise awareness about the services the Dubai Centre for Family Businesses offers, highlight the support it provides to these companies, and create opportunities for family business owners to interact with their counterparts. The series targets the family business community, including company owners and managers, as well as lawyers affiliated with or from outside these companies, and insurance and risk advisors.
The sessions will also focus on advocacy and awareness building and the sharing of global best practices through meetings with leading family companies.
Advisors’ Certification Programme
The Centre will develop a certification and accreditation programme for family business advisors in collaboration with leading global institutions to develop and qualify advisors, who will become part of a pool that families can select from. This will ensure family businesses in Dubai are able to reach out to world-class certified and accredited advisors.