Gulf family businesses need to get everything right in CEO succession plans

Gulf family businesses need to get everything right in CEO succession plans

A CEO succession planning is one of the most challenging activities the board of a family firm in the Middle East will undertake. The decision will impact business success and influence the family's welfare; it is a high-stakes situation that requires careful planning to avoid unintended consequences and controversy.

One of the primary hurdles in CEO succession within family firms is achieving alignment among the family, the board, and management. Without this alignment, the succession process can quickly devolve into tension and disagreement. CEOs of family businesses need to have the business acumen to succeed while possessing the additional skill of navigating family expectations, whether these family members are on the board, part of the management team, or are large shareholders.

Recent data shows 56 per cent of current CEOs in the Middle East have been promoted internally. The likelihood of appointing a CEO from outside the firm with little experience with the family raises the stakes of selecting someone who seamlessly integrates with the family’s culture and dynamics.

Inter-generational sustainability of family businesses is particularly crucial in countries such as Saudi Arabia and the UAE, where international trade and investment thrive.

Clear lines of succession

To address this challenge