RIYADH: Saudi family businesses, pivotal in driving the Kingdom’s economy with around 95 percent ownership, are set to secure additional funding and governance support through newly-inked agreements.
The deals will facilitate increased collaboration between the family business community, the Public Investment Fund, and the Center for Governance, allowing for enhanced support and growth opportunities.
In an interview with Arab News, Ayth Al-Mubarak, CEO of the National Center for Family Business, highlighted the memorandum of understandings, emphasizing the goal of fostering greater collaboration between the sovereign fund and the family business community.
Al-Mubarak said: “This is basically a joint objective between us and PIF. PIF is now looking to expand its collaboration with the private sector to make sure that the private sector and the family business community is partaking in the initiatives that they are having in terms of giga projects.”
He added: “Family businesses aim to align with PIF initiatives to contribute jointly to Vision 2030 objectives, creating an intersection where their roles align with PIF’s efforts in spearheading sectors.”
Al-Mubarak emphasized the historical significance of family businesses in leading sectors like banking and healthcare. Noting their extensive impact on various industries, he highlighted their participation in nearly all sectors of the economy, constituting approximately 95 percent of businesses in the Kingdom as family-owned.
The second MoU, inked with the Center for Governance, focuses on enhancing governance quality, specifically within family businesses.
“The Center for Governance is developing its expertise and capabilities to uplift boards, train board directors, board secretaries, and more. For us, this is a quite important component to uplift the governance of family businesses,” Al-Mubarak said.
“You cannot have family businesses as sustainable and as prosperous as you want if you don’t have strong boards that are effective, with board members capable and professional in conducting their jobs and carrying out their fiduciary duties appropriately,” he added.
During the two-day event, NCFB also entered into an MoU with the National Development Department to enhance the engagement of the family business community with PIF.
“We try to create platforms so that in the family business community and PIF increase their collaboration and communicate more often,” Al-Mubarak told Arab News.
“We believe that our role or a big part of our role is to act as a bridge between the family business community and the government and the government agencies. One of the key players within the Kingdom’s economy is PIF.”
Furthermore, he emphasized that PIF and its associated companies lead various industries, ensuring continuous dialogue within the family business community. The fund is considered crucial for the success of both parties and for achieving the objectives outlined in Vision 2030.
Established by royal decree, the NCFB provides services and engages with four groups of stakeholders: family businesses within the community, the government, advisors, experts, and consultants, and the general community.
“We work with all of them to ensure that we have an ecosystem that supports the continuity and growth of family businesses. To do that, we cannot operate only with family businesses,” he concluded.