THE CHALLENGES OF HAVING A CORPORATE GOVERNANCE FRAMEWORK FOR FAMILY BUSINESSES IN QATAR.

Abstract

Family-owned businesses in Qatar and the rest of the Gulf Cooperation Council (GCC) region face a number of specific challenges. In particular, these companies have difficulties related to succession, with a significant number of family-owned companies historically failing to survive to the second or third generation. These companies also face other challenges which relate to their internal accountability and decision-making processes, and to their accountability to minority shareholder members which result from age-old dilemmas, and which arise whenever there is a division between ownership and control of a business. Family-owned companies are important to the Qatari economy and represent a vast proportion of its private sector business activity and employment. Accordingly, the survival and long-term success of these companies, coupled with the successful transition of these companies to the second or third generation of their family ownership, is a matter of public concern. The application of proper corporate governance principles could help resolve many of these issues; the employment of independent non-executive directors could identify risks faced by the businesses. For example, separating the role of CEO and Chair could reduce the company’s necessity to appoint a single family member. Despite this, in Qatar no formal corporate governance code or framework applies to these family-owned businesses. This thesis recommends the adoption of a voluntary Code of Governance on a ‘comply or explain’ basis, derived from the GCC’s Guidelines for Family Businesses, to be applied to large family businesses over an annual turnover threshold. Enforcement of the code might be difficult, given the private ownership of family-owned businesses; but having a code requirement would help to develop a culture recognising the importance of good corporate governance.

Date of Award	2024
Original language	American English
Awarding Institution	HBKU College of Law