Pearl Initiative Report Highlights Preparedness And Aspirations Of Saudi Arabia’s Next-Gen Family Business Leaders

The Pearl Initiative, a leading non-profit organization dedicated to promoting corporate accountability in the Gulf region, has unveiled a pioneering report that highlights the preparedness and aspirations of the next generation of family business leaders in Saudi Arabia. The report, titled Charting the Future: Mapping Next Generation Preparedness, Involvement, and Aspirations in Saudi Arabian Family Businesses, offers a comprehensive analysis of the critical issues, challenges and opportunities facing these emerging leaders.

Importance of family businesses in Saudi Arabia’s growth

Family businesses are the cornerstone of Saudi Arabia’s economy, significantly contributing to GDP, job creation, and economic diversification. As the Kingdom progresses towards Vision 2030, the role of next-generation leaders becomes even more pivotal in sustaining this growth and driving future innovations.

Key findings

The report reveals that 65% of actively involved family members believe the next generation is well-prepared for future challenges, showcasing strong confidence in their leadership capabilities. However, only 30% of non-actively involved family members share this optimism. This difference in perception may arise from their limited involvement or awareness of the capabilities of the next generation. Additionally, 50% of both active family members and non-family professionals agree that the next generation should primarily participate in the board of directors, emphasizing the need for their active involvement in governance.

Contributors and methodology

The report is a collaborative effort between the Pearl Initiative, Jersey Finance, the Alfaisal Corporate Governance Center, and the National Center for Family Businesses (NCFB) in Saudi Arabia. The respondents represented a diverse range of sectors, including wholesale, retail, and manufacturing, with enterprises varying in size from large corporations to small family businesses.

Vineetha Mathew, Senior Advisor at the Pearl Initiative, said, “This report is a comprehensive resource offering insights into the complex dynamics and varied perspectives within Saudi Arabian family businesses. It explores perceptions of next-generation readiness, the role of non-family professionals, and the critical importance of effective governance and mentorship.”

Faizal Bhana, Director – Middle East, Africa, and India at Jersey Finance, commented, “The future dynamics of these family businesses are pivotal to the continued prosperity of the Kingdom, making substantial contributions to both GDP, job creation, and economic diversification. These insights provide a strategic foundation for addressing concerns and promoting collaborative solutions to ensure the sustained success of family businesses.”

Dr. Sohale Altamimi, Deputy CEO of the National Centre for Family Business, emphasized, “This research sheds light on the complexities of family business operations and the roles played by both family and non-family members within these enterprises. Family businesses are unique in their vision to build a legacy that can be passed down through generations. Consequently, it becomes imperative to invest in preparing the next generation with a transparent and objective methodology that helps identify their strengths, interests, and capabilities.”

The findings underscore the importance of recognizing diverse viewpoints and implementing standardized practices to enhance leadership transitions. This strategic approach fosters continuity and stability, aligning the next generation’s goals with the long-term objectives of the business, thereby driving sustained growth across generations.

The full report is available for access here.