A forum is being held on July 23 to discuss the future of family businesses and the advantages of their conversion into joint stock companies. JCCI President Saleh Kamel is initiating the forum in which 14 economic and financial experts will take part.

At a press conference held yesterday, JCCI Vice Chairman Mazen Batterjee called on owners of family businesses to consider converting them into joint stock entities in the interest of their sustainability and future.

“The forum, which will bring together prominent businessmen on one platform, aims to raise awareness among family-owned businesses of the advantages of becoming joint stock companies. Speakers will share the successful experiences of joint stock companies with participating family-run businesses. They will also discuss the challenges family enterprises may face when moving into joint stock companies,” he said.

JCCI's strategic commercial committee member Nasser Saleh said a majority of Saudi companies were family owned. “98 percent of the companies in the Gulf are family businesses; joint stock companies do not exceed one percent,” he said.

“The family-owned businesses run by their second generation do not exceed 33 percent and those by the third generation do not exceed 15 percent,” he said. This means that the death of the founder of the company contributes significantly to the company's gradual decline and ultimate collapse. However, most of the Kingdom's company owners prefer to retain their control over their enterprises, both in terms of management and decision-making,” he said.

He, however, emphasized that the transformation of family businesses into public entities were needed in the interest of their future.

Mohieldin Hakami, assistant secretary-general of JCCI, said that there were 50,000 family companies in the Kingdom. Only 156 of them had become joint stock companies.

Waleed Al-Bawardi, director of cash and markets at Tadawul, said that during 2011 only four family companies had been converted into joint stock companies.

“There is a noticeable progress this year as till now six companies have become joint stock companies. This shows that awareness among Saudi companies is growing as regards the advantages of joint stock companies. Such public companies have benefited 1.2 million people as shareholders,” he said.