Corporate Governance for Family Business Workshop Convenes at TAGSB

 

Enhancing principles of corporate governance leads to upgrading investments decision making at these entities – HE Minister Gammoh

 
We will present the government with an integrated law draft concerning corporate governance with a special concentration on family businesses – HE Dr. Abu-Ghazaleh

 
The attendees call on Abu-Ghazaleh to establish a Jordanian governance institute.

 
AMMAN --- November 21, 2011 --- Talal Abu-Ghazaleh Graduate School of Business (TAGSB) hosted today a workshop entitled “Corporate Governance for Family Business” jointly organized by TAGSB and Konrad-Adenauer-Stiftung Amman under the patronage of HE Mr. Sami Gammoh, Minister of Industry and Trade.

At the beginning of his opening speech, the Minister congratulated TAGSB for being awarded the "Best Educational Institute in Administration in Asia by the World Education Congress Asia Awards 2011 in addition to its accreditation by the Foundation for International Business Administration Accreditation (FIBAA).

Addressing the attendees in the workshop which aimed at underlying challenges that encounter owners of family businesses and the legal requirements that govern the work of these corporate, the Minister stressed that enhancing principles of corporate governance leads to upgrading investments decision making at these entities, adding “if we realize that taking into account principles of corporate governance in ordinary and listed corporations is a necessity then implementing such principles will become vital at the family businesses for the nature, significance, wide-spread and impact of these businesses on the economy.”

He stated that “corporate governance has become an essential factor for the success of the emerging markets. At the time when the global economy is tirelessly working to generate opportunities, on the other hand we find competitive threats that need to be dealt with to establish corporate governance practices as a means of success.”

The Minister said that many corporations have given governance practices the highest priority to minimize any dysfunctions that might occur at family businesses since good corporate governance practices guarantee their continuity and dissemination.

He highly praised the role exerted by the Companies Control Department at the Ministry of Industry and Trade to advance corporate governance practices in cooperation with international bodies.

Entitled “Continuity of Family Business and its Impact on the Economy”, HE Dr. Talal Abu-Ghazaleh tackled strategies of survival and success of family business and the main challenges that face them, the main factors and mechanisms to deal with them.

He said that generally talk about economic corruption is directed to the public sector but not the private one this should be corrected. We in Jordan need awareness concerning corruption at the private sector.

He also called for organizing a lecture to tackle this subject.

He mentioned that other countries have already took the lead in issuance regulations that administer corporate governance for family businesses, though, Jordan is a pioneer in developing and updating laws.

HE Dr. Abu-Ghazaleh called for the provision of an integrated law draft concerning corporate governance to be presented to the government with a concentration on family business to be conducted by Talal Abu-Ghazaleh Organization and Konrad-Adenauer Foundation.

In addition, Abu-Ghazaleh highlighted the conditions required for the continuity of the family businesses which are considered more energetic than the public corporations in addition to their capability to adapt with the needs of change and development.

The Arab world is known for its dependence in particular on the model of the family business. Despite this fact, it would be inaccurate to say that family business is more common here than in the USA or Canada.

“I would like here to affirm that business and family are two completely different entities. In most cases, there is an overlap between them that causes more than the rewards it reaps. The best way to be fair and responsible towards both your family and business is to maintain the distinction between the two as much as possible. So you need to run your business like a business and manage your family affairs like a family and no doubt you will be the winner in both cases,” Abu-Ghazaleh concluded.


From his part, Mr. Martin Beck, resident representative at Konrad-Adenauer-Stiftung said that corporate governance has been receiving greater attention in advanced and emerging economies recently while Globalization in general and the mentioned developments in particular have increased competition between companies both on the international and national level.

“Family business which is of high relevance in the Jordanian economy is highly affected by these developments on all levels, such as marketing, service provision and sources of funding.”

He added “Actually, the principle of corporate governance has been analyzed and well studied by several international organizations, namely the International Monetary Fund, the World Bank and the OECD. In 1999, the OECD issued principles of corporate governance that aim at supporting member and non-member countries to develop legal frameworks. Guidelines to support corporate governance and participation in stock markets are available. Yet, a great deal of work has to be done to apply these guidelines to the special needs of the Jordanian economy.”

 
Mr. Beck extended his thanks and appreciation to the Foundation’s long-term partner Talal Abu-Ghazaleh Organization saying “We strongly feel committed to our joint goal of supporting the sustainable development of the Jordanian economy in the frame of the principles of social market economy.”


Mr. Mustafa Nasreddin, senior executive director at TAG-Org who welcomed the attendees thanked the Minister for his patronage stressing that “the definition of family businesses has not been limited to the ownership aspect as it became a method and a scheme for management. Many corporations are currently run through this mechanism but far away from the development in the world especially in the administration field."

 
Meanwhile, several papers in the workshop tackled the significance of the family businesses presented by Mr. Saleh Al Raqqad, Dr. Mahmoud Ababneh, Mr. Ali Al Shraideh, Mr. Sami Kharabsheh and Dr. Khalid Rajhah.
At the end of the workshop, Mr. Nasreddin and Dr. Beck moderated an open discussion during which the attendees called on Dr. Talal Abu-Ghazaleh to establish a Jordanian governance institute.

 
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