Less than 15 per cent of Middle East-based businesses have a policy in place to manage and preserve their wealth for future generations, revealed Justice, Islamic Affairs and Endowments Ministry’s Rent Disputes Commission head judge Mai Sami Mattar yesterday (June 8).

She added that 37 per cent of those who have a policy fail to put it into effect because employees are not distributed in divisions where they can achieve their highest productivity, reported the Gulf Daily News (GDN), our sister publication.

Mattar was speaking during a session titled “The realities of business disputes in the courts”, which was organised by the Bahrain Family Business Association (BFBA) with the aim of briefing businessmen on family-owned business disputes.

“Studies showed that less than 50pc of organisations and companies in the West have a succession planning policy, when compared to 15 per cent in the Middle East,” she said.

“Not to mention that 37 per cent of the 15 per cent mentioned who have a policy fail to actually get a result out of it because they fail in distributing efficient employees in the right divisions of their companies, where they can develop their skills and achieve their highest productivity.

“A company needs to have a succession planning policy if it aims to survive for generations.”

Mattar added that family-owned disputes, which form around 70 per cent of the companies around the world, need to have a fixed system that shows how the ownership will be passed from one generation to another, as well as clarifies the company’s rules and includes a salary and promotion system.

“Most problems happen in family-owned business because some family members think that decisions are being taken without notifying them and therefore there should be a system governing all company partners and employees,” Mattar pointed out.

“Some successful companies have a system that is clear to everyone in terms of salaries, promotions, insurance and also shows how the ownership is passed from one generation to another.

“The company can also be audited from other companies to avoid any misunderstanding between the heirs.

“I also recommend each company setting up a judicial committee that can look into disputes without going to court, because once a family member complains in court the entire business and its reputation can be destroyed.” - TradeArabia News Service