World over only 25% businesses survive with the third generation managing them, and 5% survive with the fourth generation managing them. One of the largest conglomerates in Middle East was managed by 10 brothers under the Chairmanship of the eldest brother, who succeeded the business from the father and grew it significantly. They had to manage transition to the next generation of about 40 cousins. In order to avoid losing its competitiveness and its clout in the market due to division of the business, the Client engaged us to create a corporate governance model for the group and a succession plan for the next generation.
We studied the corporate governance models practiced in various parts of the world. We designed a corporate governance model for the group that could fit the culture of the family and that of Saudi Arabia. We ensured that the model addressed the aspirations of the present and the future partners. We also created a family council and a family constitution. The biggest challenge was the buy-in from the multiple stakeholders in the family. The group continues to be one of the largest groups in the region.
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