Nepo­tism is hit­ting firms

Don’t rely on rel­a­tives, com­pa­nies told

7 Days in Dubai - - NEWS - By Ma­hak Man­nan @Ma­hakLFC ma­hak@7days

Fam­ily busi­nesses in the Mid­dle East need to move away from tra­di­tional hir­ing prac­tices and em­ploy more women in se­nior roles to keep go­ing, as the econ­omy and wealth cre­ation is ex­pected to slow down.

Th­ese were among the find­ings of prop­erty and busi­ness con­sul­tancy Knight Frank’s 2016 Wealth Re­port.

“A trend we have been notic­ing in fam­ily busi­ness and wealth man­age­ment is the ris­ing in­volve­ment of women,” said Nada Al Hashimi, a Fam­ily Of­fice An­a­lyst at the firm.

“The num­ber of high net­worth fe­male in­di­vid­u­als has been in­creas­ing faster than that of male high net­worth in­di­vid­u­als.

“In the Mid­dle East, where so­ci­eties are more tra­di­tional and the se­nior seats are dom­i­nated by the male fig­ures in the fam­ily, more women are study­ing abroad to come back home with a strong set of skills and ex­per­tise ready to take on se­nior roles in their fam­ily busi­nesses.”

The re­port also warned that fam­ily busi­nesses are too quick to em­ploy rel­a­tives for the sake of it, some­thing that can have a detri­men­tal im­pact on the com­pany in the long run.

“Most fam­ily busi­nesses do not make it through the gen­er­a­tions mainly be­cause they do not have a solid suc­ces­sion plan,” she said. “To en­sure th­ese busi­nesses are main­tained over many gen­er­a­tions sev­eral steps could be adopted, in­clud­ing hir­ing em­ploy­ees that are not fam­ily mem­bers and fo­cus­ing on com­mu­ni­ca­tion.”

The re­port also says that fol­low­ing years of con­sid­er­able growth in the num­ber of wealthy in­di­vid­u­als around the world, the world is en­ter­ing a pe­riod of de­cel­er­a­tion, as China’ s econ­omy slow sand com­mod­i­ty­ex­port­ing emerging economies are be­ing hit by lower prices and de­mand.

One con­cern that was flagged up in the re­port of the ul­tra wealthy was that fam­ily com­pa­nies would not pass through the gen­er­a­tions.

4% The amount of fam­ily firms that make it to fourth gen­er­a­tion of own­er­ship by the same fam­ily

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