{"id":131,"date":"2024-06-10T20:39:31","date_gmt":"2024-06-10T20:39:31","guid":{"rendered":"http:\/\/xtratheme.comlawyers\/?p=131"},"modified":"2026-06-14T10:28:26","modified_gmt":"2026-06-14T10:28:26","slug":"%d8%ac%d8%b1%d8%a7%d8%a6%d9%85-%d8%a7%d9%84%d9%85%d8%ae%d8%af%d8%b1%d8%a7%d8%aa","status":"publish","type":"post","link":"https:\/\/jslawfirm.me\/en\/%d8%ac%d8%b1%d8%a7%d8%a6%d9%85-%d8%a7%d9%84%d9%85%d8%ae%d8%af%d8%b1%d8%a7%d8%aa\/","title":{"rendered":"Governance in family businesses after the Companies Law 2022"},"content":{"rendered":"<p style=\"text-align: right;\" class=\"translation-block\">Family businesses have long been a cornerstone of the Gulf economy, particularly in Saudi Arabia. However, despite their significant presence, these companies have faced fundamental challenges related to weak governance and a tendency towards personalization rather than institutional management. With the issuance of the new Companies Law of 2022, these companies now have the opportunity to restructure themselves on more sustainable and professional foundations<\/p>\n<h3 style=\"text-align: right;\"><strong>Governance is not a luxury<\/strong><\/h3>\n<p style=\"text-align: right;\">Many family businesses were run according to traditional patterns based on family relationships and individual decisions, often without a clear separation between ownership and management, or between personal interests and the general interest of the company<\/p>\n<p style=\"text-align: right;\" class=\"translation-block\">But today, with the evolution of markets and the increase in legal and regulatory challenges, governance has become an indispensable necessity to ensure continuity, reduce risks, and gain investor confidence<\/p>\n<h3 style=\"text-align: right;\"><strong>Companies Law 2022: A Qualitative Regulatory Shift<\/strong><\/h3>\n<p style=\"text-align: right;\" class=\"translation-block\">One of the most prominent features of the new system is enabling family businesses to organize their internal affairs flexibly and transparently, while maintaining their privacy. The system has introduced several regulatory tools that enhance governance, including<\/p>\n<ul style=\"text-align: right;\">\n<li class=\"translation-block\">The Family Charter: An optional legal instrument that can be registered, designed to regulate the relationship between family partners, the transfer of ownership, profit distribution, employment, and decision-making. This charter reduces disputes and transforms the company from a relationship-based entity to a structured corporate body<\/li>\n<li class=\"translation-block\"><strong>Boards of Directors and Specialized Committees<\/strong>: The system encourages the formation of effective boards of directors, defines the powers of directors, and activates the role of audit and risk committees, even in non-shareholding companies, thus enhancing oversight and transparency<\/li>\n<li class=\"translation-block\"><strong>Structural flexibility<\/strong>: A family business can move from a limited liability company to a closed joint-stock company, allowing it to put in place more precise business governance systems<\/li>\n<\/ul>\n<h3 style=\"text-align: right;\"><strong>Governance and the success of future generations<\/strong><\/h3>\n<p style=\"text-align: right;\">Over 70% of family businesses in the region do not progress beyond the second generation of management. This is often due to the lack of clear mechanisms for leadership succession and regulating relationships within the family. Here, governance plays a pivotal role<\/p>\n<ul style=\"text-align: right;\">\n<li class=\"translation-block\">Preparing the new generation: by defining the mechanisms for qualification and career progression<\/li>\n<li class=\"translation-block\">Preventing family conflicts: by documenting rights and duties, and defining the method of voting and decision-making<\/li>\n<li class=\"translation-block\"><strong>Separation of ownership from management<\/strong>: by involving external expertise, and setting standards for recruitment and promotion<\/li>\n<\/ul>\n<h3 style=\"text-align: right;\"><strong>Between governance and finance<\/strong><\/h3>\n<p style=\"text-align: right;\" class=\"translation-block\">Good governance not only enhances a company's internal stability but also increases its attractiveness to investors and financiers. Family businesses with sound governance can access bank financing, raise private investments, and even consider listing on the stock market<\/p>\n<p style=\"text-align: right;\" class=\"translation-block\">Take, for example, the idea of \u200b\u200bdeveloping a smart time management application for students: if it is presented within a well-organized family business with a clear governance system, the investor will feel confident in funding or participating, because he sees a company that is professionally managed, not in an individual or ad hoc manner<\/p>\n<h3 style=\"text-align: right;\"><strong>a summary<\/strong><\/h3>\n<p style=\"text-align: right;\" class=\"translation-block\">The 2022 Companies Law is not merely a legislative update, but rather a transitional phase towards the institutionalization of the private sector, particularly family businesses. Governance is at the heart of this transformation. It ensures the company's survival after its founder, its continuity beyond the first generation, and its evolution from a family business into an effective national institution, and perhaps even a transnational one<\/p>\n<p style=\"text-align: right;\" class=\"translation-block\">Perhaps the most important question today is not: <em>Does the family business implement governance<br>\n<\/em> but: <em>How long will it last without it<\/em><\/p>","protected":false},"excerpt":{"rendered":"<p>\u0644\u0637\u0627\u0644\u0645\u0627 \u0643\u0627\u0646\u062a \u0627\u0644\u0634\u0631\u0643\u0627\u062a \u0627\u0644\u0639\u0627\u0626\u0644\u064a\u0629 \u0631\u0643\u064a\u0632\u0629 \u0623\u0633\u0627\u0633\u064a\u0629 \u0641\u064a \u0627\u0644\u0627\u0642\u062a\u0635\u0627\u062f \u0627\u0644\u062e\u0644\u064a\u062c\u064a\u060c \u0648\u0627\u0644\u0645\u0645\u0644\u0643\u0629 \u0627\u0644\u0639\u0631\u0628\u064a\u0629 \u0627\u0644\u0633\u0639\u0648\u062f\u064a\u0629 \u0639\u0644\u0649 \u0648\u062c\u0647 \u0627\u0644\u062e\u0635\u0648\u0635. \u0648\u0644\u0643\u0646 \u0631\u063a\u0645 \u0647\u0630\u0627 &#8230; <a class=\"cz_readmore\" href=\"https:\/\/jslawfirm.me\/en\/%d8%ac%d8%b1%d8%a7%d8%a6%d9%85-%d8%a7%d9%84%d9%85%d8%ae%d8%af%d8%b1%d8%a7%d8%aa\/\"><i class=\"fa czico-133-arrows-7\" aria-hidden=\"true\"><\/i><span>Read More<\/span><\/a><\/p>","protected":false},"author":1,"featured_media":242,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[185,187],"tags":[274],"class_list":["post-131","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interview","category-187","tag-274"],"_links":{"self":[{"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/posts\/131","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/comments?post=131"}],"version-history":[{"count":1,"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/posts\/131\/revisions"}],"predecessor-version":[{"id":1893,"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/posts\/131\/revisions\/1893"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/media\/242"}],"wp:attachment":[{"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/media?parent=131"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/categories?post=131"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jslawfirm.me\/en\/wp-json\/wp\/v2\/tags?post=131"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}