Family firms urged to go public

January 30, 2013 - 1:41:02 am

DOHA: Rashid Al Mansoori, CEO of Qatar Exchange (QE), has called on the family businesses to become  active players in Qatar’s capital market.

Participating in a round table held on the occasion of releasing the Pearl Initiative-PwC yesterday, he noted that listing of the companies on QE would be a key step to ensure successful operations of these companies.

“The role of family firms can be enhanced through listing these companies and improving their governance practices as the foundation of a successful business, which will increase their performance, productivity, and stand them in good stead regardless,” Al Mansoori said.

On corporate governance of family firms, he noted that it is based on the decision-making processes and most importantly management attitudes that assist the company in achieving its objectives. It is the environment within which decisions are made and importantly power exercised. As a result, as companies seek to improve the professionalism of its activities, it needs to give greater thought to issues of governance.  

An effective governance processes may lift a significant burden from the founder, he noted.

Al Mansoori explained that the shareholders in family-owned companies can often be restricted in terms of their ability to sell their ownership stakes as the shares of unlisted enterprises are not quoted or traded on public equity markets.  Lack of liquidity presents  a significant investment risk. An effective corporate governance framework provides a way of mitigating this risk.  

He said good governance can play an important role in gaining the respect of key external stakeholders – such as actual and potential financiers, employees, customers, and local communities.  It can be thought of as providing a “licence to operate”, since it offers external stakeholders some assurance that the company is being run in an appropriate and responsible manner, with due regard for the interests of “non-insiders”. 

The Peninsula