Mr. Ibraheem Al Bahri
“Separation of management from ownership in family company”
The issue of the exchanged trustfulness within the members of a family is playing major and fundamental role to link the family affairs in the family companies with its management, also history has witnessed that family’s companies have been sold and strong to resist the tough circumstance they have faced, as well as the acute crises they have met and economical changes and did their best to evade many attempts to penetrate and invade their integrity and stability and accordingly they succeeded to overcome the period of the economical recession and regained their health and natural position.
The economical life has faced may complication during the previous 20 years due to the swift financial dealing world wide which resulted in concentration on management, finance and legal issues as well as corporate governance and their impact on the business of the companies.
Due to the above internal and external factors, it becomes imperative to separate the management of the company from its owners, the adoption of the separation (what is known to day as corporate governance) does not mean to remove or to prevent the owners of those companies to manager their companies, but it means that the manager of such company should be appointed in accordance with its qualification and capability to fill the position and should be neutral and has no relationship with the owners, but in spite of the above corporate governance, it is allowable and permissible to have a Board of Directors from the family and such Board of Directors can be enhanced or can include qualified staff from outside the family to give an administrative strength and addional power for the company to enable it to coup with a world full of extreme straggle, high demands and acute competition bearing in mind the smooth operation of the company and the issue of loss and profit and the importance of the time to execute and finalize the tasks required from the company locally and worldwide.
We believe that there is no contradiction or any conflict between the adherence of family company to the corporate governance and its applicability in order to have a mixed Board of Directors consisting of family members in Addion to Board members outside the family, mainly for smooth management and further more to develop and enhance the role and the activities of the Board of Directors itself, especially if we take into account the rapid movements in the international trade and its impact on the business of the companies which warrant swift administrative decision to coup with such international development to gain time and to avoid financial losses.