Middle East family businesses should avoid the worst excesses of western businesses practices and remain committed to the communities they work in, according to a leading family business advocate and social entrepreneur.
Badr Jafar, managing director of the family-controlled Crescent Group, made his remarks at a regional meeting of the World Economic Forum in Jordan. Jafar, in a wide- ranging speech on the role of family businesses in the region, said community should be at the heart of the family business in the Middle East.
“The West’s studied separation of management and ownership, and its often frenzied focus on quarterly results, does not fit immediately and comfortably into our culture,” he said.
“Arab family businesses are strongly embedded in their communities and consider themselves responsible not only for their own welfare but also for that of the people around them. The family’s measure of commercial success lies more in retaining a strong family business culture and providing ongoing security for the family than it does in simply making profits. We as family businesses must go after success, not profits.”
He added: “With success comes deep responsibility and we as family businesses in the region must actively seek to play an important role in addressing some of the challenges that our great region of the world faces.”
But Jafar said regional family businesses need to move to better professionalise their corporate governance structures to help smooth the transition to the next generation of control.
He said: “Without actions to institutionalise and professionalise their governance structures, family businesses face large risks of major destruction of value.”
Jafar, who beyond his family business roles is also known for his work as a social entrepreneur, added that family businesses can play a big role in promoting the role of women in the Middle East.
“There is a bad mismatch in the Arab World today, where the highest rate of education is among our women, but women also suffer from the lowest rate of employment,” he said.
“Family businesses have the best opportunity to engage more women in leadership and management positions in the companies, which in turn will have a direct positive impact on the health of their economies.”